Middle East Conflict Heats Up, Rupiah Breaks Rp16,927 per US Dollar, IHSG Falls 4.32 Percent

Illustration. (Photo: Dok. Antara)

JAKARTA - The rupiah exchange rate and the Composite Stock Price Index (JCI) on Wednesday, March 4, traded weaker as tensions in the Middle East conflict increased.

Based on market data, the spot rupiah was at Rp16,927 per US dollar (USD) as of 12.48 WIB, or down 0.33 percent. At the same time, the JCI in the I session corrected 4.32 percent to the level of 7,596.575, pressured by negative sentiment from the global market.

Deputy Governor of Bank Indonesia (BI) Destry Damayanti emphasized that the central bank would continue to be in the market to maintain exchange rate stability, while anticipating the impact of the conflict in the Middle East.

He explained that the intervention steps were carried out consistently and measured through Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions as well as Domestic Non-Deliverable Forward (DNDF) in the domestic market, and the purchase of State Securities (SBN) in the secondary market.

"The weakening of the rupiah is still aligned with the region, in MTD it weakened 0.51 percent, relatively better than the region," he said in a statement, Wednesday, March 4.

Furthermore, he said Bank Indonesia recorded strong foreign exchange reserves at the level of 154.6 billion US dollars at the end of January 2026 and the flow of foreign capital entering the domestic financial market also reached Rp. 25.7 trillion throughout 2026.

On the other hand, Director of Trade and Regulation of Bursa Members of the Indonesia Stock Exchange, Irvan Susandy, said that the weakening of the JCI was in line with the sharp correction that occurred in a number of regional indices, such as Kospi, SET, Kosdaq, Nikkei, Taiwan TAIEX, and ASX.

"(Bursa) South Korea had a trading halt after falling more than 8 percent," he said.

Irvan assessed that pressure in the stock market was triggered by the escalating geopolitical escalation in the Middle East and the closure of the Strait of Hormuz by Iran also triggered concerns about the potential for a global energy crisis.

"This is reflected in the rising world oil prices," he said.