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View all search resultsIran war pushes rupiah close to historic low
The currency briefly breached the psychological threshold of Rp 17,000 per US dollar on Monday morning, flirting with the historic low of Rp 17,300 registered during the Asian financial crisis of 1997 and 1998.
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People stand near a destroyed vehicle on March 8, 2026, as smoke rises after a reported strike on the Shahran fuel tanks in Tehran, amid the United States-Israel war on Iran. (WANA (West Asia News Agency) via Reuters/Majid Asgaripour)
T
he United States-Israeli war on Iran has pushed the rupiah closer to its weakest point in history, putting Indonesian authorities in a tight spot that may require an interest rate hike to underpin the currency and keep inflation under control amid surging energy prices.
Readings from Bloomberg show the currency briefly breaching the psychological threshold of Rp 17,000 per United States dollar on Monday morning to trade at Rp 17,009, before bouncing back to Rp 16,949 later in the day.
The figure was below the previous low of Rp 16,987 per dollar recorded on Jan. 20 and flirting with the Rp 17,300 historic low registered during the Asian financial crisis of 1997 and 1998.
The government sought to allay concerns about economic stability.
“We’re not even in a recession, let alone an [economic] crisis. We’re not even slowing down yet,” Finance Minister Purbaya Yudhi Sadewa told reporters on Monday, adding: “We’re still expanding, still accelerating. That’s what we’ll keep maintaining in the coming weeks.”
Purbaya said there was nothing to worry about, because Indonesia had “the experience and knowledge to mitigate any turbulence”, citing as examples the 2008 financial crisis, the 2015 market shocks and the 2020 coronavirus pandemic.
The geopolitical turmoil sparked by the US-Israeli attack on Iran has choked shipping in the Strait of Hormuz, through which about a fifth of global oil supply passes in peacetime, catapulting crude prices from US$70 per barrel before the first missile was fired on Feb. 28 to more than $100 a barrel.
