Rupiah weakens amid market scepticism over Iran-US negotiations
Jakarta (ANTARA) - The rupiah closed trading in Jakarta on Wednesday 47 points or 0.28 per cent weaker at Rp16,884 per US dollar, down from the previous level of Rp16,837 per US dollar.
Money market analyst Ibrahim Assuaibi said the rupiah's decline was in line with market scepticism towards the Iran-US negotiations.
"Although Iran and the US reached an understanding on Tuesday (17/2) regarding key 'guiding principles' in talks aimed at resolving their long-standing nuclear dispute, that does not mean an agreement will be reached soon, said Iranian Foreign Minister Abbas Araqchi," he stated in a written statement in Jakarta on Wednesday.
The negotiation process between the two countries is being closely monitored by energy markets as Iran is a major oil producer and is situated along the strategically vital Strait of Hormuz, a narrow waterway through which approximately one-fifth of global oil consumption passes daily.
Military risks were said to remain elevated following reports on Monday (16/2) that Iran's Revolutionary Guard conducted exercises in the Strait of Hormuz, as US forces remain deployed in large numbers throughout the Middle East.
Additional sentiment stemmed from investor caution ahead of the release of the Federal Reserve's January policy meeting minutes, which could provide fresh insight into the potential for monetary easing.
"Investors are also awaiting the US personal consumption expenditure (PCE) price index report for December, due to be released on Friday — the Fed's preferred inflation indicator that could shape interest rate expectations," Ibrahim said.
Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened on the day to Rp16,884 per US dollar from the previous level of Rp16,844 per US dollar.
Money market analyst Ibrahim Assuaibi said the rupiah's decline was in line with market scepticism towards the Iran-US negotiations.
"Although Iran and the US reached an understanding on Tuesday (17/2) regarding key 'guiding principles' in talks aimed at resolving their long-standing nuclear dispute, that does not mean an agreement will be reached soon, said Iranian Foreign Minister Abbas Araqchi," he stated in a written statement in Jakarta on Wednesday.
The negotiation process between the two countries is being closely monitored by energy markets as Iran is a major oil producer and is situated along the strategically vital Strait of Hormuz, a narrow waterway through which approximately one-fifth of global oil consumption passes daily.
Military risks were said to remain elevated following reports on Monday (16/2) that Iran's Revolutionary Guard conducted exercises in the Strait of Hormuz, as US forces remain deployed in large numbers throughout the Middle East.
Additional sentiment stemmed from investor caution ahead of the release of the Federal Reserve's January policy meeting minutes, which could provide fresh insight into the potential for monetary easing.
"Investors are also awaiting the US personal consumption expenditure (PCE) price index report for December, due to be released on Friday — the Fed's preferred inflation indicator that could shape interest rate expectations," Ibrahim said.
Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened on the day to Rp16,884 per US dollar from the previous level of Rp16,844 per US dollar.