Rupiah Rebounds This Morning, Reaching Rp 16,995 per US Dollar
JAKARTA, KOMPAS.com - The rupiah exchange rate in the spot market strengthened at the start of trading on Tuesday (31/3/2026), after closing weaker in Monday’s trading at Rp 17,002 per US dollar.
According to Bloomberg data, the Garuda currency rose 7 points or 0.04 percent to Rp 16,995 per US dollar.
Currency and Commodities Analyst, Ibrahim Assuaibi, projects that the rupiah’s movement will tend to be volatile but has the potential to close weaker in the range of Rp 17,000 to Rp 17,040 per US dollar.
“For tomorrow’s trading (Tuesday), the rupiah will be volatile but close weaker in the range of Rp 17,000 - Rp 17,040 (per US dollar),” said Ibrahim to reporters on Monday afternoon.
According to him, the market is still overshadowed by concerns over the potential escalation of the Iran conflict following attacks by the Iran-backed Houthi group based in Yemen against Israel over the weekend.
“The market remains cautious about the potential escalation of the Iran war after the Iran-supported Houthi group based in Yemen attacked Israel over the weekend. The Houthi group could open a new front in the war, given their capability to launch attacks in the Red Sea,” he explained.
On the other hand, Iran has expressed readiness to face a possible ground invasion by the United States, following reports of the deployment of thousands of US troops to the region. US President Donald Trump has also indicated the possibility of further attacks on Tehran, although negotiations are reportedly still ongoing.
“Trump last week extended the deadline for attacks on Iran’s energy infrastructure until early April. Iran has largely rejected the idea of direct talks with the US since the war began at the end of February,” Ibrahim continued.
Additionally, short-term inflation expectations have risen from 3.4 percent to 3.8 percent, reflecting concerns over persistent high price pressures, particularly due to rising energy prices.
This situation strengthens the view that the US central bank, the Federal Reserve (The Fed), may maintain high interest rates for longer. In fact, based on the CME FedWatch Tool, the market is beginning to price in the chance of a rate hike by the end of 2026, contrary to previous expectations of rate cuts.
These external pressures are further weighing on the rupiah’s movement, especially amid domestic conditions that also face fiscal challenges.
From the internal side, Ibrahim assesses that the government’s plan to implement budget efficiency must be balanced with other policies to effectively keep the state budget deficit (APBN) in check.