Jakarta \u2014 The Indonesian rupiah opened trading in Jakarta on Tuesday,\nappreciating by 63 points or 0.37 per cent to Rp16,886 per US dollar, up\nfrom the previous close of Rp16,949 per dollar.<\/p>\n
Josua Pardede, Chief Economist at Permata Bank, stated that room for\nrupiah strengthening remains narrow as markets will be highly sensitive\nto news from the Middle East and oil price movements.<\/p>\n
\u201cFor today\u2019s trading, the rupiah is still likely to move under\npressure, but depreciation is expected to range between Rp16,825 and\nRp16,975 per dollar. The Rp17,000 per dollar level has now become an\nimportant threshold, as several market projections also place it as the\nnearest pressure boundary should sentiment fail to improve,\u201d he told\nANTARA in Jakarta on Tuesday.<\/p>\n
He explained that current global sentiment remains the primary\npressure factor on the rupiah.<\/p>\n
Conflict in the Middle East or West Asia has pushed oil prices\nsharply higher, briefly touching above $115 per barrel during Asian\ntrading and breaking through $100 per barrel on Monday, 9 March\n2026.<\/p>\n
In these conditions, the US dollar strengthens as it is viewed as the\nsafest asset when uncertainty increases and markets begin reducing\nexpectations for US Federal Reserve rate cuts.<\/p>\n
Across Asia, the pattern is uniform: regional currencies weaken due\nto higher oil prices, a stronger US dollar, and increased market\ncaution.<\/p>\n
Regarding domestic sentiment, pressure stems from fiscal concerns\nafter February 2026\u2019s budget deficit widened to 0.50 per cent of gross\ndomestic product (GDP), sovereign debt yields rose, foreign ownership of\ngovernment bonds declined, and consumer confidence weakened\nslightly.<\/p>\n
On the supporting side, Josua noted that Bank Indonesia (BI)\ncontinues to prioritise rupiah stability, thereby limiting room for\ninterest rate cuts, with exchange rate stabilisation maintained.<\/p>\n
\u201cIf the conflict continues long-term, its impact on the rupiah could\nbe more severe than current pressures, as markets so far essentially\nstill regard the disruption as non-permanent,\u201d he said.<\/p>\n
Long-term warfare potential is assessed to keep energy prices at risk\nof remaining elevated, raising import and logistics costs, increasing\ndomestic inflation pressure, making external and fiscal balances more\nvulnerable, and potentially restraining foreign fund inflows into\ndomestic financial markets.<\/p>\n
Should this occur, the rupiah risks breaking through Rp17,000 per\ndollar and remaining weak longer, whilst BI is likely still to maintain\nits benchmark interest rate and promote a monetary policy stance\nfavouring stability to preserve exchange rate stability.<\/p>\n
\u201cIn other words, the rupiah\u2019s future direction is heavily determined\nby two factors: how long the conflict lasts and whether oil prices can\nconvincingly decline again,\u201d Josua said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/analysts-room-for-rupiah-strengthening-remains-narrow-amid-market-sensitivity-1773114885", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }