US Dollar Briefly Hits Rp 17,900, Rupiah Under Further Pressure

The rupiah has come under increased pressure after the US dollar briefly breached the Rp 17,900 level. A combination of escalating US-Iran tensions and high domestic demand for dollars has further weakened the Indonesian currency.

According to Investing data on Thursday, 28 May 2026, the US dollar reached Rp 17,949. It traded between Rp 17,772 and Rp 17,995 during the day.

Google Finance data showed the US dollar hit Rp 17,904 at 04:00 UTC, but later rose to Rp 17,850, a 0.37% increase.

Commodities and Currency Analyst Ibrahim Assuaibi stated that the rupiah’s weakness was triggered by a combination of external and domestic sentiments driving investors to shift funds to safe-haven assets such as the US dollar.

“The pressure on the rupiah currently stems from simultaneous external and internal factors,” Ibrahim said in his statement.

Externally, markets are observing heightened geopolitical tensions in the Middle East following renewed US-Iran conflicts. This has increased concerns over potential disruptions to global energy distribution, particularly in the Strait of Hormuz oil trade route.

Additionally, market expectations that the US Federal Reserve will maintain high interest rates for longer have further negatively impacted emerging market currencies. Elevated energy prices are seen as potentially increasing global inflation, thereby limiting the Fed’s room for monetary easing.

“These conditions have led to a tendency for foreign capital to exit emerging markets, including Indonesia,” he added.

Domestically, the rupiah’s weakness has been influenced by increased demand for US dollars for oil imports, dividend payments, and maturing debt obligations.

Ibrahim also noted that market participants are still monitoring domestic fiscal conditions and the effectiveness of government programs, which could influence investor perceptions of national economic stability.

He stated that simultaneous external and internal pressures have limited Bank Indonesia’s (BI) ability to stabilise the rupiah, despite the central bank’s continued foreign exchange market interventions.

“BI has intervened as much as possible, but market pressures remain significant,” he added.