Rupiah Hits Rp17,503 per US Dollar Amid Tensions in the Strait of Hormuz

Although economic growth of 5.61 percent in the first quarter is quite high, the impact of the chaos in the Middle East, particularly in the Strait of Hormuz, poses a threat to Indonesia.

Jakarta (ANTARA) - The rupiah exchange rate on Tuesday afternoon at 11:47 WIB moved weaker by 89 points or 0.51 percent to Rp17,503 per US dollar compared to the previous close at Rp17,414 per US dollar.

Currency and commodity economist observer Ibrahim Assuaibi said the rupiah’s weakening was influenced by tensions in the Strait of Hormuz that are still heating up.

“The tensions in the Strait of Hormuz continue to heat up even though it is considered that this war is over according to Trump (US President Donald Trump),” he said in a voice recording in Jakarta on Tuesday.

The tensions coincide with the US rejecting a peace proposal made by Iran, leading to small-scale attacks between ships in the Strait of Hormuz.

“So the United Arab Emirates is still carrying out attacks up to now, even though they are not exposed internationally. This indicates that the United Arab Emirates, after leaving OPEC member countries (Organization of the Petroleum Exporting Countries), continues to carry out attacks, possibly backed by America,” he explained.

The conflict in the Middle East is increasingly causing the dollar index to experience significant strengthening, thus impacting the rise in crude oil prices, particularly Brent crude oil.

From an internal perspective, first-quarter 2026 economic growth reaching 5.61 percent does not immediately improve the economy and strengthen the rupiah.

“Although economic growth of 5.61 percent in the first quarter is quite high, the impact of the chaos in the Middle East, particularly the Strait of Hormuz, poses a threat to Indonesia,” he stated.

In addition, during January-April 2026, 40,000 workers in labour-intensive sectors such as textile and garment manufacturing, as well as electronics, have been laid off. Ibrahim predicts that in the coming months, layoffs will increase significantly.

Negative sentiment also comes from the phenomenon of a large number of Indonesians working in the non-formal sector, namely 87.74 million people, higher than the total formal workforce.

Based on these factors, the rupiah is expected to experience significant weakening, but not more than Rp17,550 per US dollar.