Kuya Food Express JAKARTA. The Indonesian rupiah continues to face significant pressure against the US dollar. On Tuesday, May 12, 2026, the rupiah closed at Rp 17,529 per US dollar, marking one of its weakest levels in history.
According to Bloomberg on Wednesday, May 13, 2026, at 09:07 AM WIB, the US Dollar Index (DXY) saw a marginal decline of 0.03% to 98.27. Meanwhile, the rupiah in the spot market strengthened slightly by 0.08% to Rp 17,515 per US dollar at the start of trading today, May 13, 2026.
Brahmantya Himawan, an analyst at PT Finex Bisnis Solusi Future, noted a substantial correlation between the DXY and the rupiah. When the US Dollar Index strengthens, the majority of emerging market currencies, including the rupiah, tend to weaken as global capital flows back into US dollar-denominated assets. This dynamic underscores the sensitivity of local currencies to broader international financial movements.
Currently, the US dollar is receiving additional support from prevailing geopolitical factors. Tensions between the US and Iran, coupled with uncertainties in the Strait of Hormuz, are driving market participants to seek refuge in safe-haven assets. Bram explained to Kontan on Wednesday, May 13, 2026, that “as long as geopolitical tensions and energy prices remain elevated, the US dollar has the potential to stay strong in the short term.”
The market is also closely anticipating the release of US inflation data, which will heavily influence the future direction of the Federal Reserve’s (The Fed) interest rate policy. Should US inflation persist at high levels, the likelihood of the Fed maintaining elevated interest rates increases, providing a positive sentiment for the DXY. Conversely, if geopolitical tensions begin to ease and expectations for interest rate cuts grow, the US dollar could gradually weaken. Bram projects that the DXY is likely to trade within the 98–101 range in the short term. For the first half of 2026, the DXY could potentially reside in the 99–102 area, especially if conflicts in the Middle East and high energy prices continue.
Beyond the US dollar, other safe-haven assets considered attractive include the Swiss franc and the Japanese yen. The Japanese yen, in particular, is deemed quite prospective not only due to its safe-haven status but also as markets begin to perceive the potential for a more hawkish Bank of Japan policy. Furthermore, Japanese and US authorities are reportedly coordinating efforts to maintain currency market stability, making the possibility of intervention a key focus for market participants.
Bram assesses that the current pressure on the rupiah is predominantly influenced by external factors. These include the global strengthening of the US dollar, rising energy prices, and a general risk-off sentiment stemming from escalating geopolitical tensions. However, domestic factors are also beginning to draw market scrutiny, such as the condition of foreign exchange reserves, energy import requirements, and the rupiah’s sensitivity to foreign capital outflows.
“While external factors remain dominant, domestic conditions are making the rupiah more vulnerable to global pressures,” Bram stated. He further added that when geopolitical tensions escalate and the US dollar is sought after as a safe haven, emerging market currencies like the rupiah typically become the most sensitive to shifts in global capital flows, highlighting their inherent susceptibility in uncertain times.
Summary
The Indonesian rupiah recently hit a historic low of Rp 17,529 against the US dollar, driven primarily by global capital flows toward safe-haven assets. Analysts attribute this pressure to a strong US Dollar Index, elevated energy prices, and geopolitical tensions, particularly between the US and Iran. Consequently, investors are favoring the US dollar, the Japanese yen, and the Swiss franc as global markets navigate prevailing economic uncertainty.
Market attention remains focused on upcoming US inflation data, which will play a critical role in shaping Federal Reserve interest rate policies and the future strength of the dollar. While external factors currently dominate market trends, domestic vulnerabilities such as foreign exchange reserves and capital outflows are further compounding the rupiah’s instability. Analysts expect the dollar to remain strong in the short term, provided that geopolitical conflicts and high energy costs persist.