Rupiah Closes Weaker at Rp18,109 Amid US-Iran Strikes

Jakarta (ANTARA) - The rupiah exchange rate against the US dollar weakened by 44 points, or 0.24 per cent, to Rp18,109 per US dollar at Monday’s close, from Rp18,065 previously.

Money market analyst Ibrahim Assuaibi said the rupiah’s weakness was influenced by the United States and Iran launching mutual missile and drone attacks.

“Tehran targeted American facilities in countries across the Gulf on Sunday (12 July) and stated that they had once again closed the Strait of Hormuz,” he said in a written statement in Jakarta on Monday.

The resumption of the conflict has raised further doubts about the future of the interim US-Iran agreement signed last month, which aimed to reopen the Strait of Hormuz and end the war after a further 60 days of negotiations.

The renewed closure of the Strait of Hormuz has revived fears of another inflationary shock, strengthening expectations that the Federal Reserve may have to maintain high interest rates for longer.

“The minutes from the Fed’s June meeting released last week showed that some policymakers believe there are reasons to raise interest rates, while officials generally expressed greater concern over inflationary pressures even as worries about the labour market eased,” Ibrahim said.

Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened to Rp18,131 per US dollar today, from Rp18,069 previously.