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The US-Israel War Against Iran has Caused the Rupiah to Weaken

Erlina Fury Santika 03/03/2026 19:20 WIB

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According to BI JISDOR data, the rupiah has weakened again to Rp16,870 per US$ today. The weakening has been happening since the end of February, when the US-Israel armed conflict with Iran erupted.

The exchange rate of the US dollar against the Rupiah (January 1, 2025 - March 3, 2026)

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The exchange rate of the US dollar against the Rupiah (January 1, 2025 - March 3, 2026)

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Based on data from Bank Indonesia’s (BI) Jakarta Interbank Spot Dollar Rate (JISDOR), the exchange rate of the U.S. dollar against the rupiah stood at Rp16,870 at the close of trading on Tuesday (March 3, 2026).

The figure weakened by 0.13% compared with Monday’s close (March 2, 2026) at Rp16,848.

The rupiah has depreciated for three consecutive trading days since February 27, 2026. This comes after it had strengthened in the two previous sessions, as shown in the chart.

The decline in the exchange rate coincided with the outbreak of war between the United States–Israel and Iran since February 28, 2026. The attacks reportedly killed Iran’s Supreme Leader, Ayatollah Ali Khamenei.

Heightened geopolitical tensions had been widely expected to affect both the global and domestic economy, impacting exchange rates, oil prices, gold, and capital markets.

“The rupiah is still expected to face downward pressure against the U.S. dollar amid prevailing risk-off sentiment triggered by the escalation in the Middle East,” Doo Financial analyst Lukman Leong told Katadata on Tuesday (March 3, 2026).

He projected the rupiah to move within the range of 16,800–16,950 per U.S. dollar.

Amid the risk of further depreciation, Lukman expressed hope that Bank Indonesia would step up its interventions to limit the rupiah’s weakening.

Bank Indonesia previously stated it would maintain the rupiah’s movement in line with its fundamentals amid heightened global risk-off sentiment following U.S. strikes on Iran.

“Bank Indonesia will continue to closely monitor market developments and respond appropriately, including ensuring that the rupiah moves in accordance with its fundamentals,” said Erwin Gunawan Hutapea, Head of the Monetary and Securities Asset Management Department (DPMA), in a press release on Monday (March 2, 2026).

He explained that the escalation of conflict in the Middle East following U.S. attacks on Iran has fueled risk-off sentiment in global financial markets.

He also assured that BI would remain active in the market through interventions, including Non-Deliverable Forward (NDF) transactions in offshore markets as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in the domestic market.

“BI will also continue to optimize its policies to enhance the effectiveness of monetary policy transmission,” Erwin said.

Editor : Erlina Fury Santika

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."