Rupiah Closes Weakened End of Week, Approaching 17,000 Level

Jakarta — The rupiah weakened at the spot market on Friday (13 March 2026), approaching the 17,000 level, declining 65 basis points or 0.38 percent to Rp 16,958 per US dollar.

Currency and commodities analyst Ibrahim Assuaibi attributed the rupiah’s depreciation to a sharp rise in global oil prices following a statement by Iran’s new leader, Mojtaba Khamenei, declaring that the Strait of Hormuz would remain closed. This narrow waterway is a critical passage through which one-fifth of global oil and gas supplies flow.

“Market participants and analysts are concerned that a large spike in oil prices will have a global impact through inflation shocks. Brent crude futures, the global benchmark, recently traded around 100 US dollars per barrel,” Ibrahim told journalists on Friday afternoon.

Central banks, such as the Federal Reserve, may be forced to reconsider cuts to short-term interest rates if inflation rises. Higher borrowing costs could attract more foreign investment, thereby increasing the appeal of the dollar.

Beyond the Iran conflict, investors are also monitoring US inflation data this week. The consumer price index released on Wednesday showed that inflation largely remained stable in February compared to the previous month. However, these figures do not reflect the inflation spike resulting from rising oil prices due to US-Israeli military actions in Iran.

The personal consumption expenditures price index for January, to be released this weekend, is expected to provide clearer insight into US inflation. Importantly, this figure is the Fed’s preferred inflation measure and will likely be a factor in long-term interest rate expectations.

Furthermore, markets continue to highlight how debt servicing burdens limit the government’s fiscal flexibility in stimulating the economy through increased state spending. Based on estimates using the budget deficit less primary balance scheme, actual debt interest payments reached Rp 99.8 trillion in February 2026.