Rupiah weakens amid new US strike on Iran

US has launched a new attack on missile launch sites and mine-laying vessels in southern Iran. The rupiah closed 52 points or 0.29% weaker at Rp17,796 against the US dollar, down from Rp17,744. Currency analyst Ibrahim Assuaibi attributed the weakness to the US strikes. “The US has launched a new attack on missile launch sites and mine-laying vessels in southern Iran. The US military claims the action was for self-defence, and that the ceasefire with Iran remains in place,” he said in a written statement on Tuesday. He added that further military actions could complicate ongoing peace negotiations between the US and Iran, especially after Tehran repeatedly warned against additional strikes. Previously, the US and Iran had agreed on a framework to end the conflict and reopen the Strait of Hormuz. US President Donald Trump hinted at progress in negotiations with Iran, claiming the Islamic Republic would hand over enriched uranium reserves, though Iran denies plans to do so. According to Ibrahim, the rupiah’s depreciation is increasing production costs for companies reliant on imported raw materials and export markets, raising the risk of layoffs. Recent data shows a surge in layoffs, with the Ministry of Manpower recording 15,425 affected workers from January to April 2026. This has led some companies to implement efficiency measures and halt operations. “Industrial pressures are not only driven by the rupiah’s weakness but also global geopolitical conflicts pushing up non-subsidised industrial fuel prices, further increasing corporate costs,” Ibrahim said. Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened to Rp17,789 per US dollar from Rp17,743.