Rupiah Breaches Rp17,300 per Dollar, Seen Weakening to Rp17,400 by End-April

JAKARTA, Jakartaweekly.com – Indonesia’s rupiah came under renewed pressure, breaching the Rp17,300 per U.S. dollar level in Thursday morning trading, as mounting external and domestic headwinds weighed on the currency, with further weakness expected by end-April.

Currency analyst Ibrahim Assuaibi said the rupiah could weaken to Rp17,400 by the end of April, earlier than his initial projection for full-year 2026.

“The Rp17,300 level has been reached today, and it is highly likely the rupiah could break through Rp17,400 by end-April,” Ibrahim said on Thursday, April 23, 2026

He said the rupiah’s depreciation against the U.S. dollar was driven by a combination of external and domestic factors.

Read also: Rupiah Weakens Amid “Debt Wall” and Global Sentiment, Closes at Rp17.181

On the external front, he pointed to rising geopolitical tensions in the Middle East, particularly between the United States and Iran, following the breakdown of negotiations and the seizure of an Iranian oil tanker in the Strait of Hormuz.

Iran has rejected several U.S. demands, including halting uranium enrichment and restrictions related to tariffs in the Strait of Hormuz, raising the risk of a prolonged conflict that could unsettle global markets, he added.

Higher global oil prices have also added pressure. Brent crude has risen to around US$103 per barrel, while U.S. West Texas Intermediate (WTI) is trading near US$98 per barrel.

On the domestic front, pressure stems from the potential widening of the fiscal deficit due to rising energy import needs. Indonesia consumes around 2.1 million barrels of oil per day, while domestic production falls short, resulting in imports of about 1.5 million barrels per day.

“With high oil prices, the government needs to allocate a larger budget for imports, increasing the risk of a wider deficit,” he said.

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Ibrahim also noted that oil tankers operated by state energy firm Pertamina have been delayed in the Strait of Hormuz due to escalating geopolitical tensions, potentially disrupting domestic energy supply.

Fiscal pressures are also building as the government faces maturing debt obligations and rising energy subsidy costs. Increases in non-subsidized fuel prices have not been matched by adjustments to subsidized fuel, adding to the subsidy burden in the state budget.

He noted that the 2026 state budget assumes an oil price of US$70 per barrel, with an upper limit of US$92, and an exchange rate of Rp16,500 per dollar. Oil prices that have exceeded this threshold are seen as intensifying pressure on the currency.

“With these conditions, the government will require significant funds to cover imports and subsidies, which will ultimately weigh on the rupiah,” Ibrahim said.

He added that international institutions have also urged Indonesia to reduce its subsidy burden to maintain fiscal stability and support the currency.

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