Expert Shares Why Rupiah Falls Below Rp17,500 per US Dollar Today

TEMPO.CO, Jakarta - Rupiah has reached a new record low, exceeding Rp17,500 per US dollar this morning, Tuesday, May 12, 2026. Google data shows that by 11:00 a.m., the rupiah weakened to Rp17,509 per US dollar, while Bloomberg data stated that the spot rupiah at the same time was recorded at Rp17,512 per US dollar, or weakened by 98 points.

The US dollar continues to strengthen over Rupiah this week. Data from the Jakarta Interbank Spot Dollar Rate (JISDOR) Bank Indonesia showed that the rupiah reached Rp17,415 per US dollar on Monday, down from Rp17,375 the previous week. 

Currency and commodities observer as well as Director of PT Traze Andalan Futures, Ibrahim Assuabi, stated that the exchange rate movement was influenced by external and domestic factors. Escalating conflict in the Middle East remains the major external factor behind Rupiah depreciation, being made worse by the US rejecting Iran's peace proposal, mediated by Pakistan and Qatar.

"This rejection has created new tensions, as unexpectedly small-scale attacks are still occurring in the Strait of Hormuz," Ibrahim said in his statement on Tuesday, May 12, 2026.

According to him, this means that the Strait of Hormuz is still heated, even though high-level officials from warring countries have stated that the war has ended. Separately, the United Arab Emirates also attacked an oil refinery on Lavan Island, Iran.

The current hike in global oil prices also affects the exchange rate movement. "This is what has caused the Dollar Index to significantly strengthen again," Ibrahim said.

Meanwhile, on the domestic side, Ibrahim stated that the economic growth in the first quarter of 2026, which reached 5.61 percent, did not immediately lead to an improvement in the economy and a strengthening of the rupiah. This is because the components of growth in the first quarter were largely driven by government spending and consumption, while investment has not moved significantly.

Although the economic growth is quite high, the impact of tension in the Strait of Hormuz poses a threat to the domestic industry, particularly in potential job cuts.

Read: Bank Indonesia May Lift Benchmark Rate to 5% as Rupiah Weakens 

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