Rupiah strengthens alongside significant drop in oil prices

Jakarta (ANTARA) - Doo Financial analyst Lukman Leong stated that the strengthening of the rupiah against the US dollar was influenced by a significant drop in global oil prices.

The rupiah exchange rate against the US dollar at the opening of trading on Wednesday moved up by 5t6 points or 0.31 per cent to Rp17,925 per US dollar, compared to the previous close of Rp17,981 per US dollar.

“This strengthening is supported by the significant drop in global oil prices following news that Saudi Arabia is resuming half of its crude oil exports via the East-West pipeline,” he told ANTARA in Jakarta on Wednesday.

Citing Anadolu, oil prices fell amid signs of improving supply from the Middle East, including the resumption of Saudi Arabian oil exports through the East-West pipeline following repairs to damage caused by drone attacks.

Increased tanker traffic through the Strait of Hormuz has also helped alleviate concerns regarding near-term supply.

International Brent crude prices fell by 2.8 per cent or US$2.94 to US$102.35 per barrel, while West Texas Intermediate (WTI) crude futures fell by US$3.5 or 3.8 per cent to US$89 per barrel.

As the currency approaches the psychological level of Rp18,000, he added that Bank Indonesia is also reportedly re-intervening in the rupiah in the spot, Non-Deliverable Forward (NDF), and Domestic Non-Deliverable Forward (DNDF) markets.

Similarly, Permata Bank Chief Economist Josua Pardede noted that the rupiah’s weakness eased from the previous close alongside the decline in global oil prices.

“Today, the rupiah is expected to move within the range of Rp17,925–Rp18,025 per US dollar,” he said.