Rupiah to Extend Its Weakening Trend, Here Are the Causes

The rupiah’s exchange rate against the US dollar continues on a weakening trend, the spillover from the Middle East conflict that has flared over the past week. The rupiah neared the Rp17,000 per US dollar level.

According to Bloomberg, the rupiah weakened by 20.50 points or 0.12 percent to 16,925 per US dollar at the close of trade on Friday 6 March 2026. In the previous trade, the rupiah stood at 16,903 per US dollar.

“The Middle East conflict entered its seventh day on Friday with no clear signs of abatement, keeping global financial markets on edge,” currency and commodity analyst Ibrahim Assuaibi said in his statement on Friday (6 March 2026).

Fighting between the US-Israel and Iran has escalated over the past week, with missile strikes and retaliatory attacks spreading across the region. The situation has heightened concerns about disruptions to global energy supplies.

US President Donald Trump said he would like to play a role in determining the next Iranian leader after the war ends. The statement underscores the rising uncertainty about the political future of the region.

“Oil prices continued their strong rise overnight as the conflict threatens key energy infrastructure and shipping routes in the Gulf. The spike in crude prices has sparked concerns about a new wave of global inflation,” he said.

Ibrahim said this has complicated the outlook for global central banks, including the US Federal Reserve. Higher oil prices tend to trigger inflation and may make policymakers more cautious about trimming interest rates in the near term.

Moreover, he continued, investors are turning their attention to the US February non-farm payroll data, which could provide new signals about the strength of the labour market and the direction of monetary policy. A figure stronger than expected could reinforce the view that the Federal Reserve has room to delay a rate cut.