Rupiah Strengthens on Positive US-Iran Developments
The rupiah exchange rate against the US dollar on Friday morning strengthened by 63 points, or 0.35 percent, to Rp18,065 per US dollar, compared to the previous close of Rp18,128 per US dollar.
Analyst Rully Nova from Bank Woori Saudara stated that the rupiah’s strengthening was influenced by positive developments regarding geopolitical conditions between the US and Iran, which lowered oil prices.
“The rupiah is expected to strengthen today in the range of Rp18,050 to Rp18,120, influenced by global factors and the strengthening of regional currencies amid a stable dollar index and declining oil prices,” he said in Jakarta on Friday.
Citing Sputnik, the US military has suspended attacks on Iran amid ongoing negotiations but remains ready to resume military operations if necessary. Washington is reportedly still committed to seeking a diplomatic resolution to the conflict with Iran. However, US officials have denied Iranian claims of a new attack by Washington on Thursday night.
Previously, in the early hours of Wednesday (8/7), the US military launched a series of airstrikes on several areas in Iran. In response, the Iranian military reported launching retaliatory strikes against US military bases in Bahrain and Kuwait. The Iranian government also stated that Washington had violated a memorandum of understanding regarding a cessation of hostilities previously agreed upon by both parties.
“From the domestic side, factors weighing on further rupiah appreciation include economic data such as the trade balance deficit, a budget deficit exceeding expectations, and retail sales and consumer confidence data,” Rully noted.
Indonesia’s trade balance recorded a deficit of 1.61 billion US dollars in May 2026, ending a 72-month streak of consecutive surpluses since May 2020. The State Budget (APBN) deficit at the end of the 2026 fiscal year is projected to widen to Rp734.3 trillion, or 2.85 percent of gross domestic product. The 2026 APBN had targeted a deficit of Rp689.1 trillion, or 2.68 percent of GDP.
Additionally, Bank Indonesia (BI), through its Retail Sales Survey, forecasts that retail sales performance in June 2026 will remain stable, as indicated by a Real Sales Index (IPR) forecast of 221.8. This index forecast still records a contraction of 4.4 percent year-on-year (yoy).
Finally, BI noted that consumer confidence in economic conditions is indicated to remain stable in June 2026, reflected by the Consumer Confidence Index (IKK) for the period at an optimistic level (index >100) of 117.8. However, compared to the previous month, the June 2026 IKK was lower than May 2026’s figure of 120.9.