Rupiah Closes Weaker at Rp 17,839 on Tuesday Afternoon
The exchange rate of the Rupiah against the US Dollar closed weaker by 34 points, or 0.19 per cent, at Rp 17,839 per US Dollar on Tuesday afternoon. Money market analyst Ibrahim Assuaibi noted that the depreciation was influenced by continued geopolitical uncertainty and the release of inflation data from the Indonesian Central Statistics Agency (BPS).
On the external front, US President Donald Trump indicated that discussions with Iran are ongoing, despite reports from the Tasnim news agency suggesting Tehran had suspended indirect negotiations with Washington. Trump expressed hope for an agreement to extend a ceasefire and reopen the Strait of Hormuz within the coming week. Ibrahim explained that the partial ceasefire between Hezbollah and Israel could lead to a limited de-escalation of the broader conflict with Iran, which has significantly impacted global energy flows, causing oil and liquefied natural gas prices to surge by over 50 per cent.
Additionally, the White House announced that President Trump signed a proclamation on 1 June 2026, altering import tariffs for copper, aluminium, and iron. The proclamation reduces tariffs on certain agricultural equipment from 25 per cent to 15 per cent and sets a 15 per cent tariff for mobile industrial equipment, such as bulldozers and forklifts, for countries with applicable trade agreements. These changes are set to remain in effect until 31 December 2027 to encourage short-term investment.
Internally, BPS recorded that Indonesia’s economy experienced an annual inflation rate of 3.08 per cent in May 2026. The Consumer Price Index (CPI) rose from 111.09 in April 2026 to 111.40 in May 2026, with year-to-date inflation at 1.35 per cent and month-on-month inflation at 0.28 per cent. Meanwhile, Indonesian manufacturing activity returned to the expansion zone, with the S&P Global Manufacturing Purchasing Managers’ Index (PMI) rising to 50.0 in May 2026, up from 49.1 in April. Despite this positive signal, the industrial sector remains pressured by rising raw material costs and supply chain disruptions.
Furthermore, BPS reported that Indonesia’s trade surplus continued through April 2026, supported by non-oil and gas exports, particularly from the processing industry. The cumulative trade surplus for January-April 2026 reached US$ 5.64 billion, marking 72 consecutive months of surplus since May 2020. Ibrahim projects that the Rupiah will continue to fluctuate within the range of Rp 17,840 to Rp 17,900 per US Dollar.