Jakarta – The Indonesian rupiah faced headwinds Friday, opening lower against the U.S. dollar amid heightened global uncertainty and shifting expectations for Federal Reserve policy.The currency is predicted to trade within a narrow band of Rp16,840 to Rp16,900, pressured by escalating geopolitical risks stemming from tensions between the U.S.and Iran and a strengthening dollar [[1]].Despite Indonesia’s positive economic growth of 5.11% in 2025,external factors are currently dominating market sentiment.
Jakarta, Indonesia – The Indonesian rupiah is expected to experience volatility against the U.S. dollar on Friday, February 6, 2026, potentially closing slightly lower in a range of Rp16,840 to Rp16,900 per dollar.
According to Bloomberg data, the rupiah weakened 0.39%, or 65 points, to Rp16,842 per dollar, while the U.S. dollar index gained 0.06% to 97.67.
Currency and commodity analyst Ibrahim Assuaibi cited several factors influencing the rupiah’s performance. Geopolitical tensions, specifically the evolving situation between the U.S. and Iran, are contributing to market uncertainty.
Market participants are closely watching for potential talks between the U.S. and Iran, though reports suggest the possibility of those discussions failing to materialize. Despite this, officials from both countries have affirmed their commitment to the planned meeting, though the agenda remains undefined.
“Both sides still have significant disagreements regarding the scope of the discussions,” Assuaibi said on Thursday, February 5, 2026. “Iran is open to discussing its nuclear program, including uranium enrichment, with Western nations, while the U.S. also seeks to address Iran’s ballistic missile program, its support for armed proxy groups in the Middle East, and its treatment of its own citizens.”
Concerns remain that U.S. President Donald Trump may follow through on threats to attack Iran, potentially escalating conflict in the oil-rich region. This adds a layer of risk for investors monitoring the situation.
Monetary policy expectations are also playing a role, with the market anticipating a more hawkish and independent Federal Reserve under the leadership of Warsh. Expectations for Federal Reserve interest rate cuts have diminished following a pause in rate reductions in January 2026 and Warsh’s appointment.
“Financial markets currently estimate a nearly 46% probability of an interest rate cut at the June policy meeting,” Assuaibi noted.
Domestically, positive sentiment surrounding Indonesia’s economic growth is providing some support for the rupiah. The nation’s economic growth for 2025 reached 5.11% year-over-year.
This figure represents an improvement over the 5.03% year-over-year growth recorded in 2024, exceeding previous consensus forecasts from economists.
09:25 WIB
Rupiah Opens Lower at Rp16,872 per U.S. Dollar
Based on Bloomberg data at 09:04 WIB, the rupiah depreciated 0.18% to Rp16,872 per U.S. dollar. Meanwhile, the index tracking the performance of the U.S. dollar strengthened 0.07% to 97.89.
Alongside the rupiah, other Asian currencies also experienced weakness, including the Taiwanese dollar (down 0.06%), the South Korean won (down 0.37%), the Chinese yuan (down 0.04%), and the Malaysian ringgit (down 0.22%).
Conversely, the Thai baht rose 0.13%, the Indian rupee gained 0.07%, the Philippine peso increased 0.06%, the Singapore dollar strengthened 0.09%, and the Japanese yen appreciated 0.17% against the U.S. dollar.
