Rupiah Hits Rp17,800 as Job Loss Risks Rise

Rupiah closed weaker on Tuesday, 26 May 2026, driven by heightened geopolitical tensions in the Middle East. According to market data, the currency fell 52 points or 0.29% to Rp17,796 per US dollar, compared to the previous close of Rp17,744. The rupiah had even touched Rp19,845 per dollar during the session. This depreciation was also reflected in Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR), which stood at Rp17,789 per dollar, down from Rp17,743 previously. Ibrahim Assuaibi, director of PT Laba Forexindo Berjangka, attributed the negative sentiment to recent US strikes on Iranian military assets, which he said threaten regional stability and ongoing diplomatic efforts. “The US has launched new attacks on missile launch sites and mine-laying vessels in southern Iran. Although the US military claims these actions are self-defence, they could complicate peace negotiations,” Ibrahim stated in a written release. Previously, the two nations had agreed on a framework to end the conflict and reopen the Strait of Hormuz. Uncertainty increased after Iran denied US President Donald Trump’s claim regarding the surrender of enriched uranium reserves. Ibrahim warned that continued rupiah depreciation would directly increase production costs, particularly for industries reliant on imported raw materials, heightening the risk of workforce rationalisation or layoffs. Ministry of Manpower data shows a worrying trend: from January to April 2026, 15,425 workers were affected by layoffs. This surge coincided with companies implementing strict cost-cutting measures and halting operations due to uncontrolled operational costs. “The industrial sector is facing dual pressures: a weaker rupiah driving up import costs, and global conflicts pushing up energy expenses. If this persists, layoffs are expected to keep rising,” he concluded.