Rupiah projected to weaken Monday amid US-Iran conflict

Jakarta — Currency analyst Lukman Leong of Doo Financial Futures projects the Indonesian rupiah will weaken on Monday 2 March following military escalation between Iran and the United States.

The rupiah is forecast to move in the range of Rp16,750-Rp16,900 per US dollar. The weakening of the rupiah is attributed to market participants’ tendency to avoid risky assets and shift funds towards safer investments.

“The rupiah is expected to weaken and move volatile against the US dollar amid risk-off sentiment from the Middle East conflict escalation,” Lukman told Antara news agency in Jakarta on Monday.

However, he added that Bank Indonesia is expected to intervene soon to stabilise the currency.

The rupiah opened Monday trading in Jakarta down 42 basis points, or 0.25 per cent, at Rp16,829 per US dollar compared with Friday’s close of Rp16,787 per dollar.

It was previously reported that on Saturday morning 28 February local time, the United States and Israel launched a series of attacks on Iran, including strikes on the capital Tehran, resulting in infrastructure damage and civilian casualties.

Iran subsequently launched retaliatory missile strikes on Israeli territory and US military facilities in the Middle East.

Iran’s Supreme Leader Ali Khamenei was confirmed killed in a US-Israeli missile strike on his workplace.

Following Khamenei’s death, the Iranian government announced a 40-day mourning period and one week of work suspension.

The Islamic Revolutionary Guard Corps (IRGC) and the Iranian Armed Forces, in a written statement, vowed to retaliate for Khamenei’s death.