Jakarta. Indonesian rupiah plunged against the US dollar on Thursday as escalating US-Iran tensions fueled risk-off sentiment, compounded by mixed signals from the Federal Reserve and weaker domestic consumer confidence.

The rupiah closed 114 points, or 0.63%, lower at Rp 18,128 per US dollar, compared with Rp 18,014 at the previous close.

Traze Andalan Futures Director Ibrahim Assuaibi said the currency's sharp decline came as concerns intensified over escalating tensions between the United States and Iran.

US President Donald Trump recently said Washington would launch fresh strikes against Iran following attacks on Wednesday night.

“Several war-risk insurers have advised shipping companies to temporarily suspend voyages through the Strait of Hormuz, while others are reviewing their policy terms following renewed attacks on Iranian vessels, according to insurance industry sources on Wednesday,” Ibrahim said in a written statement on Thursday.

The rupiah also came under pressure following the release of minutes from the Federal Reserve’s June meeting, which showed policymakers were largely divided over potential interest rate hikes this year.

On the domestic front, the faster implementation of the 2026 state budget during the first half of the year also weighed on market sentiment. The budget is designed as the government’s primary instrument to maintain economic stability while supporting eight national priority agendas, including strengthening food and energy security and implementing the Free Meals program (MBG).

Further pressure came from the June 2026 Consumer Survey, which indicated declining public confidence in Indonesia’s economic conditions.

As of 3:59 p.m. Jakarta time on Thursday, other major currencies were quoted against the rupiah at Rp 14,001 per Singapore dollar, Rp 111.64 per Japanese yen, Rp 12,571 per Australian dollar, and Rp 20,702 per euro, according to Bloomberg data.

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