Rupiah Weakens to Rp17,105 Amid US-Iran Escalation Fears

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Rupiah banknotes are exchanged during Bank Indonesia's "Semarak Rupiah Ramadan and Blessings of Eid al-Fitr 2026" program at Suada Mosque in Mamuju, West Sulawesi, on Feb. 19, 2026. Bank Indonesia's West Sulawesi representative office prepared Rp530 billion in newly issued fit-for-circulation banknotes, in cooperation with various banks, to meet public demand for new cash denominations during Ramadan and Eid al-Fitr 1447 Hijriah. ANTARA/Akbar Tado

TEMPO.CO, Jakarta - Indonesia’s rupiah weakened 70 points, or 0.41 percent, to close at Rp17,105 per U.S. dollar on Tuesday, down from Rp16,980 in the previous session, as investors braced for a possible escalation in tensions between the United States and Iran.

Currency and commodities analyst Ibrahim Assuaibi said the rupiah came under pressure as markets grew increasingly cautious ahead of a deadline set by U.S. President Donald Trump for Iran to reopen the Strait of Hormuz. Trump has threatened strikes on Iranian infrastructure if Tehran fails to comply by Tuesday.

“Investors are preparing for potential escalation in the Middle East ahead of the deadline set by President Trump for Iran to reopen the Strait of Hormuz,” Ibrahim said in a written statement in Jakarta on Tuesday.

He added that disruptions to tanker traffic in recent weeks have tightened supply expectations and increased risk premiums across oil markets.

According to Ibrahim, Iran has rejected a U.S. proposal for a 45-day ceasefire and a phased reopening of the Strait of Hormuz linked to broader negotiations on sanctions relief and reconstruction. Instead, he said, Tehran has called for a permanent end to hostilities, binding guarantees against future attacks, sanctions relief, and compensation for damages.

Trump, Ibrahim said, reiterated that Tuesday’s deadline was firm and warned that failure to comply could trigger U.S. strikes on Iranian infrastructure, including power plants and bridges.

The confrontation has disrupted global energy flows and pushed oil prices higher, fueling inflation concerns and complicating the outlook for monetary policy, he said.

Investors are also awaiting key U.S. inflation data due on Friday, which could offer fresh clues on the Federal Reserve’s interest-rate path.

Meanwhile, Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened on Tuesday, falling to Rp17,092 per U.S. dollar from Rp17,037 previously.

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