Rupiah slips as Middle East tensions, Jakarta protests weigh
The rupiah weakened 0.11% on Thursday as investors balanced Middle East geopolitical risks against domestic policy concerns in Jakarta.
Source: The Jakarta Globe · August 27, 2026 at 10:31 AM · AI-assisted report
Single-sourceJAKARTA, 27 AUGUST 2026 —
The rupiah weakened 0.11% on Thursday as investors balanced Middle East geopolitical risks against domestic policy concerns in Jakarta.
Market Impact
The currency closed at Rp 17,744 per US dollar, down 19 points from its Wednesday close of Rp 17,725, according to Bank Indonesia data. It had opened at Rp 17,781, a 0.32% decline from the previous day’s close, before paring losses as the session progressed.
Traze Andalan Futures director Ibrahim Assuaibi said the rupiah remains under pressure from global factors, including developments in the Middle East and expectations for US monetary policy. He noted that negotiations involving Iran and Qatar could ease concerns over disruptions to energy supply through the Strait of Hormuz, a critical chokepoint for global oil trade.
Reports indicated that Iran and Oman are finalizing an agreement on access and revenue sharing for the strait, following statements from Iran’s Islamic Revolutionary Guard Corps. Qatar’s prime minister was scheduled to travel to Tehran on Thursday to resume talks aimed at ending the six-month conflict in the region. The US had paused direct strikes on Iran for about a month while pursuing economic pressure, fueling speculation that supply disruptions could ease.
Yet Ibrahim cautioned that geopolitical risks remain elevated. He said Iran has reiterated that the strait will not reopen until the US meets Tehran’s demands, leaving the outlook uncertain. On the US side, investors digested the latest Personal Consumption Expenditures (PCE) data, released on Thursday. Core PCE inflation—excluding food and energy—held steady at 3.3% year-on-year in July, matching market expectations. Both headline and core PCE rose 0.2% month-on-month.
Looking ahead, markets are expected to focus on weekly US initial jobless claims and a speech by Federal Reserve Governor Kevin Warsh at the Jackson Hole Symposium on Friday.
Domestically, investors monitored peaceful demonstrations outside Indonesia’s House of Representatives building in Jakarta. Protesters from groups including the Pati United People’s Alliance (AMPB) called for the immediate passage of an Asset Forfeiture Bill and the death penalty for corrupt officials. Lawmakers met with demonstrators and pledged to continue deliberations on the bill until its December 15, 2026 deadline.
Ibrahim also highlighted a sharp decline in public satisfaction with the Prabowo Subianto-Gibran Rakabuming Raka administration. A Tempo Data Science survey conducted from July 31 to August 11 showed government approval at 37% in August, down from 58% in March and 75% in December 2025. Rising prices of basic necessities were cited as the main driver of dissatisfaction.
For Friday’s trading, Ibrahim expects the rupiah to remain volatile with a weakening bias, moving within a range of Rp 17,740 to Rp 17,790 per dollar.
Elsewhere in regional currencies, the Singapore dollar traded at Rp 13,961, the Japanese yen at Rp 111.36, the Australian dollar at Rp 12,746 and the euro at Rp 20,679, according to Bloomberg data at 3:59 p.m. Jakarta time.
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