Rupiah Weakens Again as Oil Prices and Global Sentiment Weigh on Currency

JAKARTA — The weakening of the Indonesian currency continued this Monday afternoon, driven by a combination of external and domestic factors. According to Bloomberg, the Rupiah exchange rate reached its lowest level of Rp 17,680 per US dollar at 12:26 WIB.

Lukman Leong, an analyst at Doo Financial Futures, stated that the depreciation during the morning and afternoon sessions was primarily caused by external factors, specifically the resurgence of global ‘risk-off’ sentiment on Friday. He noted that market pressure emerged after investors were disappointed by the outcome of the meeting between Chinese President Xi Jinping and US President Donald Trump, which failed to provide significant solutions regarding the US-Iran conflict. This geopolitical tension has also contributed to the rise in global crude oil prices, pushing the Rupiah’s range between Rp 17,550 and Rp 17,650.

In addition to external pressures, Leong noted that internal factors have also contributed to the Rupiah’s decline. Separately, currency and commodity analyst Ibrahim Assuaibi mentioned that a speech by Prabowo on Saturday (16/5/2026) was viewed negatively by the market. In the speech, Prabowo suggested that because people in rural areas do not use US dollars, the weakening Rupiah is not a significant issue.

Assuaibi argued that such remarks reinforce investor perceptions that the government lacks a clear strategy to mitigate pressure on the Rupiah. He highlighted the importance of government communication in maintaining market confidence, suggesting that the administration should focus on explaining concrete steps to strengthen the currency, such as controlling energy imports, developing the B50 biodiesel programme, and strategies to face global pressures. He further noted that the rhetoric might reflect a disconnect in communication, as modern rural populations are increasingly well-informed and sensitive to economic shifts.