Rupiah weakens to Rp16,970 amid Middle East conflict uncertainty

The rupiah weakened by 12 points or 0.07 per cent to Rp16,970 per US dollar at the opening of trading in Jakarta on Monday morning, compared with the previous close of Rp16,958 per US dollar.

Josua Pardede, Chief Economist at Permata Bank, assessed that continued uncertainty regarding the Middle East conflict was dampening market risk sentiment and impacting rupiah movement.

“Ongoing uncertainty related to the Middle East conflict is weighing on market risk sentiment, which is affecting the movement of the rupiah,” he told ANTARA in Jakarta on Monday.

The escalation of geopolitical tensions in the region was deemed to have increased following the White House’s statement that the scale of attacks against Iran had been raised to a level exceeding previous expectations. The Pentagon was reported to have deployed Marine Expeditionary Units to the region.

As tensions mounted, crude oil prices also rose, bolstering the US dollar. On Friday (13 March), Brent oil prices increased by 2.67 per cent to US$103.14 per barrel.

However, the strengthening of the US dollar was temporarily restrained following the release of US Gross Domestic Product (GDP) data for the fourth quarter of 2025. The figure was surprisingly revised downwards to 0.7 per cent quarter-on-quarter from the previous estimate of 1.4 per cent quarter-on-quarter, reflecting emerging signs of weakening in US economic conditions, according to Pardede.

Meanwhile, the Federal Reserve’s preferred inflation indicator, the PCE Price Index, edged down slightly to 2.8 per cent year-on-year in January 2026 from 2.9 per cent year-on-year in the previous month, whilst the Core PCE Price Index rose marginally to 3.1 per cent year-on-year from 3.0 per cent year-on-year.

“In today’s trading, the rupiah is expected to move within the range of Rp16,900–Rp17,050 per US dollar, given the absence of any indication that geopolitical tensions are easing and investor wait-and-see sentiment ahead of Indonesia’s extended holiday period beginning Wednesday (18 March) this week,” Josua said.