Rupiah Plummets to Rp 18,167 Amid Rising Oil Prices and Middle East Tensions
The Rupiah continued its decline during trading on Monday, 8 June 2026. In spot market trading as of 10:50 WIB, the Rupiah was traded at Rp 18,167 per US Dollar, representing a depreciation of 131 points or 0.73 per cent from its previous position of Rp 18,036 per US Dollar.
Economic and money market observer, Ibrahim Assuaibi, stated that the Rupiah exchange rate could potentially plummet to the Rp 19,000 per US Dollar level by the end of June 2026. “Based on current conditions, there is a high possibility that the Rupiah could reach the Rp 19,000 level by the end of this month,” Ibrahim said in a voice message received on Monday.
He explained that the significant drop in the Rupiah was primarily driven by geopolitical issues, followed by the global policies of the US Federal Reserve. “This pertains to the heating situation in the Middle East, where the US has conducted attacks against Iranian territory in the Strait of Hormuz,” he noted.
In response, Iran has launched retaliatory attacks against US allies in the Middle East, particularly in Kuwait and the United Arab Emirates, further escalating tensions. “This will cause warfare in the Middle East, especially in the Strait of Hormuz, to intensify,” Ibrahim added.
Furthermore, Israel continues to expand its territory in both Gaza, Palestine, and Southern Lebanon, drawing condemnation from the UN, the US, and Iran. Tehran perceives that its allies are facing significant challenges, increasing the likelihood of Iranian attacks against Israel. “This information has strengthened the US Dollar and caused oil prices to rise,” said Ibrahim.
Additionally, the Federal Reserve’s policies are a contributing factor, as US labour data showed a significant increase last week. This condition suggests that the Fed is likely to maintain high interest rates and may even implement a rate hike in the fourth quarter of 2026. “This means that low-interest rate policies are unlikely to occur, and Trump will not intervene in the Fed’s policy. Due to sufficiently high inflation, this global central bank policy will maintain and potentially increase interest rates,” he concluded.