Rupiah strengthens as global crude oil prices fall
The rupiah exchange rate against the US dollar at the opening of trading on Wednesday strengthened by 28 points, or 0.16 percent, to Rp17,695 per US dollar, compared with the previous close of Rp17,723 per US dollar.
Doo Financial Futures currency analyst Lukman Leong said the rupiah’s strengthening was influenced by the decline in global crude oil prices amid hopes for peace in the Middle East.
“The rupiah has the potential to strengthen against the US dollar as global crude oil prices fall amid rising hopes for peace in the Middle East, following reports that Iran and Oman are discussing the establishment of a ‘temporary joint maritime corridor’ in the Strait of Hormuz,” he told ANTARA in Jakarta on Wednesday.
Citing Xinhua, Omani Foreign Minister Sayyid Badr bin Hamad Al Busaidi and Iranian Foreign Minister Seyed Abbas Araghchi discussed efforts to restore freedom of navigation through the Strait of Hormuz.
The two ministers discussed developments related to shipping through the strategic waterway and stressed the need to continue talks to reach a practical understanding that could facilitate the continuation and smooth flow of shipping, while supporting regional security and stability.
They also reviewed the latest developments in the region and various efforts to create conditions that would allow the resumption of dialogue and negotiations to narrow differences and reach a peaceful settlement of various unresolved issues.
Based on Middle East geopolitical dynamics, Anadolu reported that Brent crude oil prices plunged to around 86.2 US dollars per barrel, extending a 2.4 percent decline in the previous session. Likewise, West Texas Intermediate (WTI) also fell 5.5 percent to 80.40 US dollars per barrel.
For domestic sentiment, Lukman assessed that there was no significant sentiment affecting the rupiah exchange rate. “However, investors will be wary of and closely watch the demonstration tomorrow (Thursday 27/8).”
Based on these factors, the rupiah is predicted to range between Rp17,650 and Rp17,750 per US dollar.