Rupiah Closes 0.71 Per Cent Weaker at Rp17,966 per US Dollar

The rupiah exchange rate closed weaker by 127.5 points, or 0.71 per cent, to Rp17,966 per US dollar in Wednesday afternoon trading. Money market observer Ibrahim Assuaibi noted that the rupiah’s decline, approaching the Rp18,000 mark per US dollar, was influenced by a combination of global and domestic sentiments.

Externally, investors are closely monitoring developments in the Middle East conflict. Tensions have escalated following Israel’s continued military operations in southern Lebanon, while Iran has reportedly launched ballistic missiles towards Kuwait and Bahrain. “Further rounds of talks involving Israel and Lebanon are scheduled for Wednesday, while uncertainty persists regarding negotiations between Washington and Tehran,” Ibrahim stated in Jakarta on Wednesday.

He added that reports from Iranian media suggesting a lack of communication between Tehran and Washington in recent days have sparked speculation that negotiations have reached a deadlock. Simultaneously, surging oil prices have triggered concerns regarding global inflation, prompting speculation that the US Federal Reserve will maintain high interest rates for a longer period. Data released on Tuesday (2/6/2026) showed that US job vacancies increased unexpectedly in April 2026, strengthening expectations that the US central bank will remain hawkish in its monetary policy.

Market participants are now awaiting several US economic indicators, including ADP employment reports, the ISM services index, and factory orders data, which will serve as indicators for the Fed’s direction ahead of the non-farm payrolls release on Friday (5/6/2026).

Domestically, Ibrahim observed that sentiment towards the rupiah worsened after May 2026 inflation was recorded at 0.28 per cent month-to-month, higher than the 0.13 per cent recorded in April 2026. This inflationary rise was driven by volatile food prices, energy costs, administered prices, and the weakening rupiah exchange rate.

On the trade front, Indonesia’s trade balance in April 2026 maintained a surplus of US$89.1 million, marking the 72nd consecutive month of surplus since May 2020. According to BPS data, the April surplus was primarily supported by non-oil and gas trade, which recorded a surplus of US$3.53 billion. However, Ibrahim noted that the April trade surplus narrowed sharply, underscoring pressures on purchasing power and external resilience due to global supply disruptions caused by the blockade of the Strait of Hormuz by the Iranian Revolutionary Guard.

For Thursday’s trading (4/6/2026), Ibrahim projects the rupiah will move fluctuated within the range of Rp17,960 to Rp18,030 per US dollar.