Rising tensions between the USA and Iran pose a severe risk to Indonesia’s financial stability, stated Syafruddin Karimi, an economist at Padang-based Andalas College.
Karimi careworn that “geopolitical escalation following the U.S. strikes on Iran’s nuclear services may ship shockwaves by rising markets like Indonesia, significantly within the type of rupiah depreciation, rising inflation, and monetary strain resulting from power subsidies.”
His assertion got here within the wake of President Donald Trump’s affirmation that the U.S. navy had launched focused strikes on Iran’s key nuclear websites − Fordow, Natanz, and Isfahan − calling the operation a “spectacular navy success” and warning of additional motion if Iran refuses to pursue peace.
“ International markets reacted sharply to the developments. Crude oil costs surged, investor urge for food for safe-haven property like gold and the U.S. greenback spiked, and inventory markets throughout Asia skilled sharp sell-offs. Analysts warn that if Iran retaliates by closing the Strait of Hormuz, oil costs may soar to US$130 per barrel. This situation, modeled by Oxford Economics, may push U.S. inflation to six p.c and halt any potential charge cuts by the Federal Reserve this yr,” Karimi stated as quoted in a press release on Monday, June 23, 2025.
He stated additional that such a growth would doubtless set off capital outflows from rising markets, together with Indonesia, inserting downward strain on the rupiah. A weaker foreign money, he added, may inflate the price of imported items and burden Indonesia’s fiscal place, particularly as gasoline subsidies enhance in tandem with world oil costs.
“The federal government should act decisively and swiftly,” Karimi emphasised. “The Indonesian Central Financial institution (Financial institution Indonesia) and the Ministry of Finance have to coordinate in safeguarding international trade reserves, managing power provide chains, and offering credible communication to keep away from panic in monetary markets.” he famous.
As the worldwide financial outlook turns into more and more unsure, economists ask Indonesia to undertake a proactive stance. Past macroeconomic stabilization, strategic power planning and geopolitical danger mitigation are anticipated to be vital for preserving Indonesia’s long-term financial resilience.
This disaster, Karimi concluded, “is a stark reminder that international conflicts have direct home implications. The time to reply is now − earlier than the financial fallout turns into unmanageable.”
On June 21, 2024, the USA launched a coordinated navy strike focusing on Iran’s key nuclear services − Fordow, Natanz, and Isfahan. These websites have lengthy been central to Iran’s controversial uranium enrichment program. Based on U.S. President Donald Trump, the strike was supposed to “neutralize imminent threats” and strain Tehran into halting its nuclear ambitions.
The assault marks a major escalation in U.S.-Iran tensions, following months of failed diplomatic engagement and a collection of proxy confrontations within the Center East. Whereas the White Home claimed the operation was exact and profitable in disabling vital infrastructure, Iran has denounced it as an act of struggle, vowing retaliation.
The focused services are amongst Iran’s most fortified and strategically necessary. Natanz, positioned in central Iran, homes superior centrifuges, whereas Fordow is constructed deep underground to withstand airstrikes. The Isfahan web site is a key processing middle for uranium conversion.
The worldwide group has expressed concern over the potential for broader regional destabilization. Analysts warn that Iran’s attainable retaliation, significantly the closure of the Strait of Hormuz − a key world oil transit route − may disrupt world power markets and exacerbate geopolitical volatility.
