Rupiah Reaches Rp17,000 Per Dollar and IHSG Plummets; Analyst: Middle East Conflict Could Last Six Months
JAKARTA – The Indonesian rupiah weakened past the level of Rp17,000 per US dollar during Monday trading (9 March 2026). Simultaneously, the Composite Stock Price Index (IHSG) declined sharply, losing nearly 5 per cent.
The sharp depreciation of the rupiah and IHSG decline occurred due to the intensifying conflict in the Middle East, which has disrupted market conditions.
“The IHSG has weakened by 5 per cent, and the rupiah has reached Rp17,000 per dollar. There are several contributing factors, both external and internal,” said currency and commodities analyst Ibrahim Assuaibi in a statement to journalists on Monday (9 April 2026).
Ibrahim explained that externally, tensions in the Middle East are continuing. Iran’s new leadership has been selected—Mojtaba Khameini, who replaces Ayatollah Khomeini, who was killed in an Israeli-US attack some time ago. Mojtaba’s leadership style resembles that of the Ayatollah, suggesting that resistance and warfare are likely to continue.
“There has been a change in leadership in Iran, and we observe that this new leader is also an Islamist fundamentalist. Consequently, it is highly likely that over the next six months, the Middle East conflict will continue,” he stated.
President Donald Trump of the United States has even declared his intention to eliminate or replace the existing Iranian regime. This has significantly heightened tensions in the Middle East, accompanying the closure of the Hormuz Strait. Several oil-producing nations, including the United Arab Emirates, Iraq, and Saudi Arabia, have reduced their production following the Hormuz Strait closure.
“This production reduction is driving up global crude oil prices for both crude oil and Brent oil, currently at $117 per barrel. Many analysts believe crude oil prices will likely reach $200 per barrel if the Middle East crisis is not resolved within one month,” he explained.
On another note, Ibrahim noted that the US and Israel, through ground warfare, would find it quite difficult to control Iranian territories because Iran is a mountainous region. He recalled historical ground wars such as the Korean War, where the US and its South Korean ally suffered defeat despite an armistice when China, allied with North Korea, intervened.
Vietnam likewise experienced similar outcomes. Therefore, Trump must be mindful of undertaking ground military operations. This expectation of ground warfare failure is driving up oil prices, as well as natural gas prices, which subsequently affects downstream sectors.
“Rising oil prices will trigger an economic crisis. We return to 2008, when following the US-led war in Iraq, an extraordinary economic crisis occurred,” he concluded.