Rupiah strengthens amid peace negotiation signals from the US

Jakarta (ANTARA) - The rupiah exchange rate closed higher in Jakarta trading on Thursday, gaining 7 points or 0.04 percent to Rp16,904 per US dollar from the previous close of Rp16,911 per US dollar.

Market analyst Ibrahim Assuaibi attributed the rupiah’s strengthening to interim diplomatic signals from Iran, which is reviewing a US-supported proposal for peace negotiations.

“The market is considering interim diplomatic signals from Tehran, where officials are reportedly reviewing a US-backed proposal aimed at halting hostilities,” he said in a written statement in Jakarta on Thursday.

Although Iran has not officially accepted the plan, the market views this as not a direct rejection, fostering cautious hopes for a potential path to de-escalation.

However, uncertainty remains high as Iran has publicly denied direct negotiations with Washington and indicated that key differences persist.

“The lack of clarity has made traders cautious,” he stated.

The market is also monitoring highly volatile oil prices in recent weeks, as the conflict disrupts energy flows from the Gulf, a critical region for global crude oil supplies. Brent crude has surged above $119 per barrel earlier this month due to supply disruption concerns.

“The Strait of Hormuz, a vital transit route for about one-fifth of global oil shipments, remains a market focal point, with any threats to maritime traffic potentially triggering further price spikes,” Ibrahim said.

“Investors are also closely watching signals from Washington, where officials have warned of harsher actions if Iran does not engage constructively, adding another layer of uncertainty to the outlook,” he added.

The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia today actually strengthened to Rp16,903 per US dollar from the previous Rp16,905 per US dollar.