Rupiah Continues to Weaken Due to Middle East War Sentiment and Oil Price Surge

Jakarta, VIVA – The rupiah’s exchange rate against the US dollar is predicted to remain volatile but closed weaker in trading today.

Based on data from the Jakarta Interbank Spot Dollar Rate (Jisdor) from Bank Indonesia, the rupiah’s rate against the US dollar stood at Rp16,957 on Friday, 27 March 2026. This position represents a weakening of 54 points from the previous rate of Rp16,903 in Thursday’s trading on 26 March 2026.

Meanwhile, in spot market trading on Monday, 30 March 2026, up to 09:01 WIB, the rupiah was traded at Rp16,981 per US dollar. This position weakened by 1 point or 0.01 percent from the previous position at Rp16,980 per US dollar.

Economic and money market observer Ibrahim Assuaibi stated that the rupiah is predicted to weaken further, caused by sentiment from the escalation of war in the Middle East. US President Donald Trump stated that talks to end the war with Iran are progressing well, so he will halt attacks on that country’s energy facilities for 10 days.

“Although Trump announced a halt to attacks on Iran’s energy infrastructure, the US has also sent thousands of troops to the Middle East, with Trump considering whether to use ground forces to seize Iran’s strategic oil centre on Kharg Island,” said Ibrahim in his daily research on Monday, 30 March 2026.

An Iranian official told Reuters that the US proposal, consisting of 15 points delivered to Tehran via Pakistan, is “one-sided and unfair”.

The war has reduced global oil supplies by 11 million barrels per day, with the International Energy Agency describing the crisis as worse than the two 1970s oil shocks and the Russia-Ukraine gas war combined.

In addition, the market is also anticipating a high-inflation scenario. At the beginning of the year, traders expected at least two interest rate cuts from the Federal Reserve (Fed). However, since the conflict began and after the Fed’s policy decision on 18 March, they have reduced their dovish bets.

Conversely, they are anticipating a tightening of 12 basis points by the US central bank, according to Prime Market Terminal. Higher interest rates tend to burden gold by reducing its appeal as a non-yielding asset.