Shadowed by Iran-US Conflict and Oil Price Surge, Rupiah Stalls at Rp 16,997 Per US Dollar

JAKARTA — The rupiah exchange rate in the spot market failed to extend gains through the close of trading on Tuesday, 17 March 2026.

The Garuda currency closed flat at Rp 16,997 per US dollar, matching the previous day’s closing position. The rupiah’s flat movement occurred after it had strengthened earlier in the session, opening at an appreciation of Rp 16,970 per US dollar.

Money market and commodities analyst Ibrahim Assuaibi said the rupiah’s stagnation was influenced by a combination of external and domestic factors, including geopolitical sentiment in the Middle East.

These tensions have had a direct impact on disruptions to energy distribution routes through the Strait of Hormuz, one of the world’s primary oil trade corridors.

The disruptions have driven a surge in global crude oil prices. Assuaibi noted that since the conflict intensified, Brent crude prices have risen approximately 33 per cent, whilst crude oil has increased by up to 37 per cent.

The rise in energy prices is a pressure point for the rupiah as it risks widening the current account deficit and increasing inflationary pressure.

“One of the reasons for the rupiah’s stagnation is still related to the issue of shipping disruptions in the Strait of Hormuz. This remains the primary focus during the war between the United States, Israel, and Iran. We are now in the third week and so far there has been no agreement whatsoever between these three countries,” Assuaibi told journalists on Tuesday afternoon.

Although the United States has pushed for NATO countries to become involved in securing shipping lanes, conditions in the Strait of Hormuz remain far from fully recovered. Iran is said to only permit vessels unaffiliated with the US and Israel to pass through, which further narrows access to global energy distribution.

Furthermore, markets are also awaiting the outcome of a US Federal Reserve meeting. Assuaibi estimates the Fed will maintain interest rates in the range of 3.5 per cent to 3.75 per cent.

However, investor attention is chiefly focused on the direction of future policy, particularly in responding to the impact of rising oil prices on the global economy.

Domestically, the government is working to keep the national budget deficit below 3 per cent of GDP, doing so amid earlier discussions about widening the deficit due to global pressures.