Jakarta. The rupiah barely moved on Tuesday, as escalating geopolitical tensions and pre-holiday caution kept the currency pinned near the Rp 17,000 level.

The Indonesian rupiah (IDR) closed flat at around Rp 16,997 in afternoon trading on March 17, after briefly strengthening by 25 points earlier in the session.

Currency analyst Ibrahim Assuaibi said the rupiah’s muted movement reflected heightened market anxiety over the potential closure of the Strait of Hormuz, which has rattled global oil prices.

“The rupiah is also stagnating ahead of the Eid holiday stretching through March 24. However, it is still expected to fluctuate,” Ibrahim said on Tuesday.

Bank Indonesia’s decision to hold its benchmark interest rate at 4.75% also helped anchor the currency, as policymakers seek to maintain exchange rate stability.

Ibrahim noted that market attention remains firmly on the ongoing conflict involving the United States, Israel, and Iran, now entering its third week. “So far, there has been no agreement on a ceasefire among the three countries. This has driven a significant increase in crude oil prices,” he said.

The rupiah also traded cautiously ahead of the US Federal Reserve’s upcoming rate decision, with markets expecting the Fed to keep rates steady at 3.5–3.75%.

“Market participants are now focused on the central bank’s policy guidance, particularly as rising oil prices are having a substantial impact on the global economy,” Ibrahim added.

Domestically, sentiment was weighed down by concerns over Indonesia’s state budget deficit potentially breaching the 3% of GDP threshold. The government is currently reviewing its spending strategy to ensure the fiscal deficit remains below the statutory limit.