US-Iran War Triggers Panic, US$1.1 Billion in Foreign Capital Outflow from Indonesia

Jakarta — Bank Indonesia Governor Perry Warjiyo disclosed a significant outflow of foreign capital from Indonesia during March 2026, driven by the escalating conflict in the Middle East between Iran and the United States and Israel.

Warjiyo stated that portfolio market outflows from Indonesia reached US$1.1 billion in March 2026, marking a reversal from January 2026, which recorded inflows of US$1.6 billion. The shift was triggered by heightened uncertainty in global financial markets resulting from Middle Eastern geopolitical tensions.

“Driven by increased uncertainty in global financial markets due to the Middle Eastern conflict,” Warjiyo emphasised during a virtual press conference following Bank Indonesia’s board of governors meeting on Tuesday, 17 March 2026.

Beyond the impact on foreign capital flows, Warjiyo warned that trade balances and financial accounts could also be disrupted, potentially widening Indonesia’s current account deficit to the upper bound of forecasts. Declining global economic prospects coupled with rising international oil prices warrant careful attention, as they risk expanding the current account deficit towards the upper range of 0.9%-0.1% of GDP, he stressed.