Middle East Geopolitics and Indonesia’s Economic Data Controversy Weigh on Rupiah

JAKARTA, Jakartaweekly.com – Foreign exchange analyst Ibrahim Assuaibi said the weakening of the rupiah in Thursday’s trading was driven by a stronger US dollar amid escalating geopolitical tensions in the Middle East, particularly in the Strait of Hormuz, as well as debates over the accuracy of economic growth data.

In today’s trading, Thursday, 14 May 2026, the rupiah exchange rate reached Rp17,527 per US dollar in the Non-Deliverable Forward (NDF) market.

Ibrahim highlighted domestic conditions, particularly Indonesia’s first-quarter 2026 economic growth data, which has sparked debate among academics and analysts.

He said there is a gap between the official economic growth figures and real conditions on the ground. According to him, several academics estimate that actual growth is in the range of 4.6 to 4.8 percent.

Therefore, he urged the government, particularly Badan Pusat Statistik, to adopt a phased revision mechanism for economic data, similar to the system used in Amerika Serikat.

“Economic growth should be released first, followed by first and final revisions. That way, the public can get a more accurate picture,” he said in a statement on Thursday, 14 May 2026.

Ibrahim said data transparency is important to maintain public trust, especially as people continue to face economic pressure from rising prices and rupiah depreciation.

“At the grassroots level, people are still facing quite heavy economic pressure. This is what the government needs to pay attention to,” he said.

Beyond domestic factors, Ibrahim also noted that rising tensions between Iran and Middle Eastern countries backed by the Amerika Serikat have created global market uncertainty, strengthening the US dollar index.

He said the situation in the Strait of Hormuz has become a key concern for market participants following reports of attacks on Iranian oil facilities allegedly involving the Uni Emirat Arab and Arab Saudi with US support.

According to him, these developments have raised fears of a broader conflict in the Middle East that could disrupt global energy supply routes.

“About 20 percent of global oil transportation is currently completely disrupted. This is pushing oil prices higher and strengthening the US dollar index,” he said.

Ibrahim added that the US government is reportedly seeking additional war funding from Congress, signaling that Washington may be preparing for a prolonged conflict with Iran.

On the other hand, he pointed to large-scale military exercises conducted by Iran as an indication of its readiness for open conflict.

“The situation in the Middle East is increasingly tense, and the market sees geopolitical risks as still very high,” he said.

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