Rupiah Weakens to Rp17,500 per US Dollar, Market Shadowed by US-Iran Conflict and MSCI Announcement

REPUBLIKA.CO.ID, JAKARTA – The rupiah exchange rate moved lower by 69 points or 0.40 per cent to Rp17,483 per US dollar on Tuesday morning (12/5/2026) compared to the previous close at Rp17,414 per US dollar. In spot market monitoring, the rupiah rate even touched Rp17,506 per US dollar.

Doo Financial Futures currency analyst Lukman Leong said the rupiah weakened due to fading hopes for peace between the United States (US) and Iran.

“The rupiah is expected to remain vulnerable to weakening against the US dollar amid dimming hopes for US-Iran peace and persistently high global crude oil prices,” he said in Jakarta on Tuesday (12/5/2026).

Citing Xinhua, Iran submitted a draft proposal to the US to halt conflict on all fronts, provide guarantees of no further aggression against Iran, and lift US sanctions and naval blockades.

The proposal also demands a 30-day timeframe to remove US sanctions on Iran’s oil sales and release Iran’s frozen assets.

Previously, Iran rejected a US peace proposal because it “would mean accepting excessive demands” from Washington, as reported by Sputnik.

US President Donald Trump stated that Iran’s response to the US proposal to end the conflict was highly unacceptable.

Regarding domestic sentiment, investors are awaiting Indonesia’s March 2026 retail sales data, to be released this afternoon.

“Retail sales are expected to be slightly higher, at 6.8 per cent compared to 6.5 per cent in February,” Lukman revealed.

An announcement from Morgan Stanley Capital International (MSCI) is also predicted not to provide positive sentiment for the Composite Stock Price Index (IHSG) and will further pressure the rupiah.

“There will be stocks removed and some large-cap stocks downgraded,” he said.

Based on these factors, the rupiah is forecasted to trade in the range of Rp17,350-Rp17,500 per US dollar.