Rupiah Weakens Past 17,800, Forecasted to Decline Further

The Indonesian rupiah closed Tuesday, June 2, 2026, trading above the 17,800 mark against the US dollar, weakening by 34 points to 17,839. This continued depreciation signals ongoing pressure on the Indonesian currency.

Analysts anticipate further volatility for the rupiah. Ibrahim Assuabi, Director of PT Traze Andalan Futures, predicts the currency will trade between 17,840 and 17,900 per US dollar on Wednesday, suggesting a continued downward trend. The Jakarta Interbank Spot Dollar Rate (Jisdor) set by Bank Indonesia stood at 17,863, while the transaction rate for selling dollars was 17,972.

The rupiah's weakness is occurring amidst a broader strengthening of the US dollar. International factors, including the conflict in the Middle East, are playing a significant role. President Donald Trump's comments on ongoing talks with Iran, coupled with reports of Tehran suspending indirect negotiations with Washington, add to geopolitical uncertainty. The ongoing conflict between Israel and Hezbollah in Lebanon also poses a risk of wider regional escalation, further impacting currency markets.

Domestically, recent economic data offers a mixed picture. Indonesia's inflation rate for May was reported at 3.08 percent year-on-year, with the Consumer Price Index rising slightly. However, the manufacturing sector showed signs of recovery, with the Purchasing Managers' Index (PMI) returning to expansion territory at 50.0 in May, up from 49.1 in April. Despite this domestic improvement, the rupiah remains susceptible to global economic and geopolitical headwinds.

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However, it will close weaker in the range of Rp 17,840-17,900 per US dollar.