Rupiah Weakens Amid US-Iran Struggle for Control of Strait of Hormuz

Jakarta (ANTARA) - The rupiah exchange rate closed weaker today, down 30 points or 0.17 percent to Rp17,424 per US dollar from the previous close at Rp17,394 per US dollar.

Currency and commodity economic observer Ibrahim Assuaibi assessed the rupiah’s weakening as due to the struggle for control over the Strait of Hormuz between the US and Iran.

“Market sentiment remains fragile following the renewed military exchanges on Monday (4/5), when US and Iranian forces launched fresh attacks in the Gulf as both sides sought to assert control over the strategic waterway,” he stated in a written release in Jakarta on Tuesday.

Citing Sputnik, US armed forces fired shots at two civilian ships carrying goods from Khasab, Oman, to Iran, killing five people.

However, Iran’s state-owned television station, IRIB, quoting a senior local military source, described the American statement as untrue. Iran is said to have only prevented US ships from passing through the waterway by firing two missiles at a US warship.

“This escalation in tensions has effectively destroyed the fragile ceasefire and heightened concerns over prolonged supply disruptions,” said Ibrahim.

Looking at domestic sentiment, the Central Statistics Agency (BPS) reported Indonesia’s economic growth at 5.61 percent year-on-year in the first quarter of 2026.

“In addition, various government policies on inflation control, as well as government stimuli to boost consumption such as transport ticket discounts, the provision of Holiday Allowances (THR) or 14th-month salaries, and the setting of the BI-Rate at 4.75 percent, have also encouraged public consumption,” he said.

The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia on Tuesday also moved weaker to Rp17,425 per US dollar from the previous Rp17,368 per US dollar.