Rupiah Closes Weaker at 17,667, Analysts Identify Causes
The rupiah exchange rate in the spot market closed weaker at an all-time low during trading on Monday (18/5/2026). According to Bloomberg data, the Indonesian currency fell by 71 points, or 0.40 per cent, to the level of Rp 17,668 per US Dollar.
Meanwhile, according to Bank Indonesia’s JISDOR rate, the rupiah stood at Rp 17,666 per US Dollar, weakening from its previous position of Rp 17,496 per US Dollar.
Currency and Commodity Analyst, Ibrahim Assuaibi, assessed that the rupiah’s weakness is in line with the strengthening of the US currency, occurring alongside increased inflation risks due to high global oil prices. “The strengthening of the US Dollar is occurring because of rising inflation risks driven by high oil prices, which reinforces expectations that the Federal Reserve may maintain high interest rates for a longer period,” Ibrahim told reporters on Monday afternoon.
He noted that the prospect of tight monetary policy from the Fed is strengthening because rising energy prices are seen to be slowing the disinflation process in the United States. This has caused the inflation rate to drift further away from the 2 per cent target set by the Fed.
In addition to inflation factors, efforts to resolve the US-Israel-Iran conflict are also facing obstacles. This situation follows reports of an attack on a nuclear power plant in the United Arab Emirates (UAE), while US President Donald Trump is reportedly set to discuss military options against Iran.
Ibrahim stated that discussions between Trump and Chinese President Xi Jinping last week also showed no positive indications regarding efforts to ease geopolitical conflict, despite China being the world’s largest oil importer. Drone attacks in the UAE and Saudi Arabian territories, coupled with increased political rhetoric between the US and Iran, have further triggered market concerns regarding the escalation of conflict in the Middle East region.
UAE officials stated they are investigating the source of the attack on the Barakah nuclear power plant. The UAE government also emphasised its full right to respond to what it described as a “terrorist attack.” Meanwhile, Saudi Arabia has reportedly intercepted three drones entering Iraqi airspace.