Rupiah Expected to Face Pressure Amid Middle East Uncertainty

Market participants continue to monitor developments in the Middle East as the newly announced US-Iran ceasefire appears fragile. Jakarta (ANTARA) - Permata Bank’s Chief Economist Josua Pardede forecasts that the rupiah will remain under pressure due to uncertainties surrounding the potential ceasefire in the Middle East. “Tensions have escalated following Iran’s reimposition of the blockade on the Strait of Hormuz, amid Israel’s ongoing military operations in Lebanon,” he told ANTARA in Jakarta on Friday. The rupiah exchange rate strengthened by 7 points or 0.04 percent to Rp17,083 per US dollar on Friday morning, from the previous close at Rp17,090 per US dollar. According to Josua Pardede, market participants are still closely watching developments in the Middle East, as the newly announced US-Iran ceasefire seems fragile ahead of today’s scheduled peace negotiations in Pakistan. This is due to Zionist Israel’s large-scale attacks in Lebanon, which have resulted in 250 deaths and thousands injured. These developments are seen as triggering new concerns over the progress of US-Iran negotiations, driving up global oil prices and strengthening risk-off sentiment. Another factor stems from the minutes of the Federal Open Market Committee (FOMC) meeting in March 2026, which show that several Fed officials are beginning to consider a “two-way” approach in determining future policy interest rates. Pressure for continued interest rate hikes may still be necessary if inflation remains above target. The majority of FOMC members assess that risks of rising inflation and declining employment are at high levels, with many noting that these risks are increasing amid developments in the Middle East. “Prolonged conflict in the region could potentially drive more persistent increases in energy prices, with higher input costs that may pressure core inflation,” Josua explained. Based on these factors, the rupiah is expected to range between Rp17,000-Rp17,125 per US dollar.