Rupiah Strengthens Influenced by Hopes for Iran-US Negotiations

The rupiah’s exchange rate strengthened by 4 points or 0.02 percent to Rp17,123 per US dollar on Wednesday morning, from the previous close at Rp17,127 per US dollar.

Woori Saudara Bank analyst Rully Nova stated that the rupiah’s strengthening was influenced by hopes for negotiations between Iran and the US.

“The rupiah is expected to strengthen today in the range of Rp17,070 - Rp17,120, influenced by hopes for a second round of negotiation space between the US and Iran, which is driving down oil prices and weakening the dollar index,” he told ANTARA in Jakarta on Wednesday.

A Sputnik report revealed that US Vice President JD Vance is likely to lead the US delegation again in the second round of negotiations with Iran if it takes place. US President Donald Trump stated that the next round of negotiations between Washington and Tehran could occur within the next two days in Pakistan.

Previously, talks were held in Pakistan’s capital, Islamabad, over the past weekend to permanently end the US-Israel war against Iran that began on 28 February, but no agreement was reached. Efforts are underway to hold the next round of discussions.

“The second negotiation does not necessarily guarantee a point of agreement, but hopes for falling oil prices will remain intact,” he said.

Looking at domestic sentiment, demand in the bond auction is said to offer hopes for a decline in bond yields and government debt financing.

“Government bond demand in yesterday’s auction rose 34 percent, mainly contributed by medium-term tenors reaching Rp42 trillion, driving yields down 20 to 30 basis points, but the debt interest payment burden remains high relative to the APBN (State Revenue and Expenditure Budget),” Rully revealed.