Rupiah Weakens, Closing at 17,706 per US Dollar; Food Prices May Surge
The Rupiah exchange rate in the spot market closed weaker in trading on Tuesday (19/05/2026). The Rupiah depreciated by 38 points, or 0.22 per cent, to the level of Rp 17,706 per US Dollar.
Currency and commodity analyst Ibrahim Assuaibi stated that the Rupiah’s weakness was triggered by geopolitical uncertainty in the Middle East. Global markets are closely observing US President Donald Trump’s decision to delay planned attacks against Iran to allow room for negotiations. Trump noted that there remains a significant opportunity for the US to reach an agreement with Iran, aimed at preventing Tehran from acquiring nuclear weapons.
These statements were made several hours after Trump announced the postponement of military action, providing space for diplomatic talks. However, the ongoing tensions have placed significant pressure on the Strait of Hormuz, a strategic waterway that transports approximately one-fifth of the world’s oil supply. This situation has raised concerns regarding potential disruptions to the global energy supply.
Iranian Foreign Ministry Spokesperson Esmaeil Baghaei confirmed on Monday that Tehran’s position had been conveyed to the US via Pakistan, though the details of the communication were not disclosed. Meanwhile, a Pakistani official, speaking on condition of anonymity, stated that Islamabad had presented a new proposal to both the US and Iran, though the negotiation process is reportedly moving slowly. US officials have denied claims regarding the progress of these negotiations.
Ibrahim noted that these geopolitical developments are a primary concern for market participants, as the situation could potentially impact oil price stability and global inflation. Additionally, US Treasury Secretary Scott Bessent has extended a sanctions exemption for 30 days, allowing energy-vulnerable nations to continue purchasing Russian oil transported via sea routes.
Markets are also closely watching recent developments at the US central bank. A White House official stated that Donald Trump will appoint Kevin Warsh as Chair of the Federal Reserve this coming Friday. The appointment follows Senate approval for Warsh to serve a four-year term, succeeding Jerome Powell. Investors remain cautious as the market evaluates the direction of Federal Reserve policy under this new leadership. Domestic sentiment has also contributed to the pressure on the Rupiah.