Rupiah Nears Rp 17,000 per US Dollar: Geopolitics and Fed Policy Weigh Down

JAKARTA, KOMPAS.com - The rupiah exchange rate in the spot market nearly touched the psychological level of Rp 17,000 per US dollar at the close of trading on Friday (27/3/2026).

According to Bloomberg data, the Garuda currency closed weaker by 76 points or 0.45 percent at Rp 16,980 per US dollar this afternoon.

Currency and commodity analyst Ibrahim Assuaibi assesses that the dynamics of geopolitics in the Middle East, along with changes in expectations for US monetary policy, are the main factors behind the weakening of the Indonesian currency.

Trump also announced a temporary halt to attacks on Iranian energy infrastructure for 10 days.

However, amid that statement, the United States is reported to still be sending thousands of additional troops to the Middle East region.

In fact, Trump is said to be considering the option of using ground forces to seize Iran’s strategic oil centre on Kharg Island.

On the other hand, Iran’s response to the US proposal shows that tensions have not eased.

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

Ibrahim explained that this conflict has had a significant impact on global energy supplies.

The International Energy Agency (IEA) even assesses that the current energy crisis has the potential to be worse than the two oil shocks of the 1970s combined with the Russia-Ukraine gas crisis.

That situation has also driven changes in market expectations regarding inflation and the direction of interest rates.

If at the beginning of the year market players expected at least two interest rate cuts by the US central bank, the Federal Reserve (The Fed), that view is now starting to shift.