Jakarta. Rupiah weakened against the US dollar on Monday as renewed tensions between Washington and Tehran heightened risk aversion, while expectations of tighter US monetary policy added further pressure on the Indonesian currency.

The rupiah closed 29 points, or 0.16%, lower at Rp 17,722 per US dollar, compared with Rp 17,693 at the previous close.

Traze Andalan Futures Director Ibrahim Assuaibi said the rupiah came under renewed pressure as escalating tensions between the US and Iran made markets increasingly cautious.

The US military reportedly struck two missile launchers on Iran's Larak Island in the Strait of Hormuz on Sunday, marking the first known US attack against Iran since late July 2026.

Iran responded by attacking two US air bases in Jordan, according to Iranian local media reports on Monday.

The rupiah also weakened following Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium.

In his speech, Warsh emphasized that restoring price stability remained the central bank's main priority, prompting markets to increase speculation over another interest rate hike at the Fed's September meeting. Warsh still faces the task of bringing inflation back toward the Fed's 2% target.

Domestically, the rupiah was also pressured by global geopolitical uncertainty and rising energy prices, which could place an additional burden on the state budget.

As of the end of June 2026, the government had spent around Rp 233 trillion on energy subsidies and compensation. The figure is expected to rise further by year-end and could put greater pressure on Indonesia's fiscal position in 2027.

As of 3:59 p.m. Jakarta time, the Singapore dollar traded at Rp 13,928, the Japanese yen at Rp 110.94, the Australian dollar at Rp 12,685, and the euro at Rp 20,560.

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