Rupiah weakens amid lingering shadow of US-Iran war escalation

Jakarta (ANTARA) - The rupiah exchange rate weakened by 29 points or 0.17% to Rp17,064 per US dollar on Tuesday morning from the previous close at Rp17,035 per US dollar. Currency analyst at Doo Financial Futures, Lukman Leong, stated that the rupiah’s weakening is still overshadowed by the escalation of the US war with Iran. “The rupiah is expected to weaken against the US dollar due to concerns over the escalation of the Middle East war after Trump (US President Donald Trump) reiterated that the US will bomb Iran’s power plants and bridges on Tuesday (7/4),” he told ANTARA in Jakarta on Tuesday. Citing Sputnik, Trump warned Tehran that the US military could completely destroy Iran in “one night”, and this could happen as early as 7 April. On 30 March, Trump said Washington would “blow up and completely eliminate” all of Iran’s power plants, oil wells, Kharg Island, and desalination plants if a peace agreement is not reached and the Strait of Hormuz is not reopened. Then on Sunday (5/4), Trump threatened to carry out the operation on 7 April unless Iran reopens that strategic waterway. The US President added that this is a critical period and future US actions will depend on Iran’s response. As for Iran, as reported by Anadolu, it rejected the idea of a ceasefire with the United States due to fears that a battle pause could allow its enemies to regroup and resume attacks. Iran’s Foreign Ministry spokesman Esmaeil Baqaei said Tehran would only consider a ceasefire if there are guarantees to prevent the war from restarting. In addition to guarantees to prevent a cycle of ceasefire and new conflict, Iran also demands that decisions related to national security “must ensure no further aggressive actions.” “With the current situation and developments, I see Rp17,000 as still quite ideal and it will not have a major impact on the financial market. However, BI (Bank Indonesia) needs to continue to guard against volatility and not allow the rupiah to weaken too far,” Lukman revealed. Based on those factors, the rupiah is predicted to range between Rp17,000-Rp17,100 per US dollar.