Rupiah Strengthens as Tensions in the Middle East Ease

REPUBLIKA.CO.ID, JAKARTA – The rupiah exchange rate moved stronger by 62 points or 0.36% to Rp 17,325 per US dollar on Thursday morning compared to the previous close at Rp 17,387 per US dollar.

Josua Pardede, Chief Economist at Permata Bank, assessed that the rupiah’s strengthening was triggered by the easing of tensions in the Middle East between the United States and Iran, as the Chinese government announced support for a ceasefire.

“Such conditions have driven the majority of global currencies to strengthen against the US dollar, including the rupiah,” he said in Jakarta on Thursday (7/5/2026).

Citing Anadolu, China expressed support for Iran amid the conflict with the United States, coinciding with Beijing preparing to welcome a visit from US President Donald Trump next week.

Chinese Foreign Minister Wang Yi added that a complete cessation of hostilities is very important, while the resumption of conflict is deemed unacceptable. Therefore, the continuation of negotiations is highly crucial.

US President Donald Trump stated that talks with Iran have gone “very well” in the last 24 hours and that an agreement to permanently end the US-Israel war is “very likely to be achieved.”

When asked if there was a specific deadline to reach an agreement, Trump emphasised that “there has never been a deadline.”

“The Chinese government has expressed its support for a comprehensive ceasefire in the Middle East, thereby increasing hopes for progress in negotiations between the US and Iran,” Josua said.

From an economic data perspective, the release of the ADP Employment Change for April 2026, which was lower than expectations, also pressured the US dollar. The indicator rose to 109,000 from the previous 61,000 but remained below market expectations of 120,000.