Rupiah Weakens Amid Escalating Middle East Geopolitical Tensions

Jakarta (ANTARA) - The rupiah weakened by 26 points, or 0.15 per cent, to Rp17,939 per US dollar at the opening of trading on Tuesday, compared with the previous close of Rp17,913 per US dollar.

Doo Financial analyst Lukman Leong said the rupiah’s weakness was driven by escalating geopolitical tensions in the Middle East.

“The rupiah is expected to weaken against the US dollar amid escalating geopolitical tensions in the Middle East, which have pushed global crude oil prices back up,” he told ANTARA in Jakarta on Tuesday.

According to Xinhua, Yemen’s Ansarullah (the Houthis) said they had launched a new ballistic missile attack targeting King Khalid International Airport in Riyadh, the Saudi Arabian capital. Ansarullah military spokesperson Yahya Sarea also said the group had carried out a drone attack on King Khalid Air Base in Khamis Mushait, in south-western Saudi Arabia, claiming the strike had hit its target directly.

Ansarullah also reported that Saudi Arabia had launched 119 attacks on areas under its control, including Sanaa International Airport in the Yemeni capital and the Bab al-Mandab Strait.

The conflict pushed West Texas Intermediate crude futures up 2.06 per cent to close at US$93.74 a barrel, while Brent crude rose 1.84 per cent to US$106.65 a barrel.

On domestic market sentiment, continued outflows from the local equity market remained a drag. Most Asian currencies were also weaker in the morning.

Based on these factors, the rupiah was forecast to trade in a range of Rp17,850 to Rp18,000 per US dollar.