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

Jakarta (ANTARA) - The rupiah exchange rate against the US dollar weakened at the close of trading on Monday, falling 44 points or 0.24 percent to Rp18,109 per US dollar from the previous close of Rp18,065 per US dollar. Money market analyst Ibrahim Assuaibi stated that the rupiah’s depreciation was influenced by the US and Iran launching missile and drone attacks against each other. “Tehran targeted US facilities in countries across the Gulf on Sunday (12/7) and said it had again closed the Strait of Hormuz,” he said in a written statement in Jakarta on Monday. The renewed conflict casts further doubt on the future of a temporary US-Iran agreement signed last month, which aimed to reopen the Strait of Hormuz and end the war after 60 days of further negotiations. The closure of the Strait of Hormuz has revived concerns about another inflationary shock, reinforcing expectations that the Federal Reserve may need to keep interest rates higher for longer. “Minutes from the Fed’s June meeting released last week showed some policymakers believed there was a case for raising interest rates, while officials generally expressed greater concern over inflationary pressures even as worries about the labour market eased,” Ibrahim said. The Bank Indonesia Jakarta Interbank Spot Dollar Rate (JISDOR) also moved lower today, reaching Rp18,131 per US dollar from the previous Rp18,069 per US dollar.