Rupiah Under Pressure as US Dollar Nears Rp17,800

The rupiah closed sharply weaker against the US dollar on Tuesday (26 May 2026) trading ahead of the extended Eid al-Adha holiday. According to Refinitiv data, the rupiah closed at Rp17,775 per US dollar, a 0.25% depreciation. This marks the weakest level on record and brings the currency closer to the psychological threshold of Rp17,800 per dollar. Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major global currencies, weakened by 0.16% to 99.087 at 3pm WIB. The rupiah failed to capitalise on the US dollar’s global weakness. The US dollar weakened today as investor optimism grew over the possibility of a deal to reopen the Strait of Hormuz and end the three-month-long Iran conflict. Although the likelihood of a near-term agreement remains low, hopes for peace have pushed oil prices below $100 per barrel. This has eased pressure on emerging market currencies and improved investor appetite for riskier assets. Recent developments show Iran’s chief negotiator and foreign minister are in Doha for talks with Qatar’s prime minister regarding a potential deal. US President Donald Trump stated that talks with Iran were proceeding well but warned of new strikes if negotiations fail. Meanwhile, US Central Command reported conducting new strikes to protect its forces from Iranian threats. Despite ongoing geopolitical tensions, markets are responding to the possibility of a path towards reopening the Strait of Hormuz. A reduction in extreme oil supply risks could ease pressure on inflation and global growth.