Rupiah Expected to Strengthen as Potential Global Supply Disruptions Ease

Jakarta (ANTARA) - The rupiah exchange rate moved flat by 0 points or 0.00 percent to Rp17,337 per US dollar on Monday morning, unchanged from the previous close at Rp17,337 per US dollar.

Currency analyst at Doo Financial Futures, Lukman Leong, assessed that the rupiah has potential to strengthen as concerns over global supply disruptions ease.

“The rupiah has potential to strengthen in response to Trump’s statement that he will ‘free’ ships in the Strait of Hormuz, which eases concerns over global supply disruptions, thereby pressuring oil prices,” he told ANTARA in Jakarta on Monday.

Citing Anadolu, US President Donald Trump stated that the US will begin escorting neutral foreign ships out of the Strait of Hormuz, described as a humanitarian signal to countries trapped in a conflict they did not join.

The US President stated that he has instructed his representative to inform those countries that the US will use its “best efforts” to guide the ships and their crews out of the prohibited route, adding that the ships will not return until the area is safe for navigation.

Trump named the initiative the “Freedom Project,” saying that many ships are stranded, lacking food and other essentials needed to maintain the health of their large crews.

Other sentiment was also influenced by the weakening US dollar over the weekend amid manufacturing data below expectations and yen interventions against the US dollar.

However, the rupiah’s strengthening is predicted to be limited as investors await Indonesian economic data to be released today, including trade data and inflation.

“Indonesia’s YoY (year-on-year) inflation is estimated to fall from 3.48 percent to 3.0 percent, and the surplus is estimated to be at $4 billion,” said Lukman.

Based on these factors, the rupiah is expected to range between Rp17,250-Rp17,400 per US dollar.