Rupiah strengthens Wednesday morning amid falling oil prices

Jakarta — The Indonesian rupiah strengthened 12 points, or 0.07 per cent, to Rp16,851 per US dollar at the opening of trading in Jakarta on Wednesday, compared with the previous close of Rp16,863 per US dollar.

Currency analyst Lukman Leong from Doo Financial Futures attributed the rupiah’s strengthening to a substantial decline in crude oil prices. “The rupiah is expected to consolidate with limited potential for further strengthening, supported by the significant fall in oil prices,” he told ANTARA in Jakarta on Wednesday.

International crude oil benchmarks have declined sharply. Brent crude was trading at $87.6 per barrel, whilst West Texas Intermediate (WTI) crude oil hovered around $84.2 per barrel, following a sharp drop from above $119 per barrel on Monday (9 March) triggered by concerns over potential disruptions to supply through the Hormuz Strait due to the Iran-US-Israel conflict.

According to Leong, the price decline stems from statements by US President Donald Trump indicating that the conflict with Iran is expected to end “soon”, though he denied it would conclude this week. “There is optimism from Trump’s statements that could secure the Hormuz Strait, and his indication that the war will end in the near future, which, whilst uncertain, provides positive market sentiment,” Leong said.

However, he cautioned that the ongoing conflict continues to burden the rupiah’s performance. Based on these factors, the rupiah is forecast to trade within the range of Rp16,800–Rp16,950 per US dollar.