Rupiah Slips to Rp 17,836 Amid Iran-US Tensions and Investor Concerns Over Kopdes Merah Putih

The rupiah’s exchange rate against the US dollar (USD) is forecast to remain volatile but closed weaker today. According to Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor), the rupiah stood at Rp 17,789 against the USD on Tuesday, 26 May 2026, weakening by 46 pips from Monday’s level of 17,743. Spot market trading on Friday, 29 May 2026 until 09:03 WIB saw the rupiah traded at Rp 17,836 per USD, a 9-pip or 0.05% decline from the previous level of Rp 17,827. Economic and foreign exchange analyst Ibrahim Assuaibi stated that Bank Indonesia (BI) can only intervene in the international market and has done so to the best of its ability. “External factors have a stronger influence on market sentiment,” Ibrahim said in his daily research on Friday, 29 May 2026. He attributed the rupiah’s depreciation to US tactics in its conflict with Iran, particularly attacks on southern Iran amid claims of peace deals, which have driven up oil prices. Oil prices rose by around 3% on Thursday, with Brent crude reaching $97 per barrel and WTI at $91 per barrel. The situation has been exacerbated by renewed hostilities in the Russia-Ukraine conflict, with both sides resuming active attacks, disrupting energy logistics not only in the Middle East but also in Europe. Assuaibi added that higher fuel prices are also complicating matters for the US, not just for its citizens but also for its monetary authorities due to concerns over rising inflation. Market participants expect the US Federal Reserve to maintain high interest rates until year-end, with some forecasting further hikes. Such expectations have bolstered the US dollar, contributing to the rupiah’s weakness, compounded by domestic issues prompting foreign investors to withdraw funds from Indonesia.