Rupiah Falls to 17,600 per US Dollar: What are the Reasons?

The Rupiah exchange rate has come under pressure, reaching Rp 17,600 per US dollar on Friday (15/5/2026).

Money market analyst, Ibrahim Assuaibi, said the Rupiah’s weakening was triggered by a combination of external and domestic sentiment. This sentiment includes geopolitical tensions in the Middle East, a strengthening US dollar, and high interest rate trends.

“External conditions are causing the dollar to strengthen, and rising oil prices are also having an impact on the Rupiah’s weakening,” Ibrahim said in a statement on Friday (15/5/2026).

The incident of a cargo ship sinking in Omani waters has also added to market concerns. The seizure of several ships by Iran has further increased anxiety about the security of global oil distribution routes.

According to Ibrahim, these conditions have caused global oil prices to rise. Investors are also seeking safe-haven assets in the form of the US dollar.

Reuters reported that the US dollar index was at 98.98 on Friday. This position is the highest in two weeks.

On a weekly basis, the US dollar index is expected to strengthen by more than 1 percent. This increase is the largest since early March 2026.

“There is a high probability that the US central bank will not cut interest rates this year. This indicates that maintaining higher interest rates will have an impact on the strengthening of the dollar index, especially coupled with the trade war,” he said.