Rupiah Weakens Amid Middle East Geopolitical Tensions
Jakarta (ANTARA) — The rupiah weakened 4 points, or 0.02 per cent, to Rp17,646 against the US dollar at Monday’s opening trade, compared with the previous close of Rp17,642 per US dollar.
Money market observer Ibrahim Assuaibi said the rupiah’s weakness this morning was influenced in part by escalating geopolitical tensions in the Middle East.
“In this morning’s trading, the rupiah weakened, one of the causes being geopolitical tensions in the Middle East,” Ibrahim told ANTARA in Jakarta on Monday.
According to him, the heightened tensions lifted the US dollar index and crude oil prices, putting pressure on the rupiah exchange rate.
Ibrahim noted that West Texas Intermediate (WTI) crude oil stood at around US$91.92 per barrel, or roughly Rp1.62 million per barrel, while Brent crude was around US$96.55 per barrel, equivalent to approximately Rp1.70 million per barrel.
The rise in oil prices, he added, could increase foreign currency needs to cover oil imports.
“Demand for oil imports at higher prices means the government must prepare a considerable amount of dollars. So it is only natural that the rupiah weakened in this morning’s transactions,” he said.
On the domestic front, Ibrahim said the market was also monitoring the activity of Mount Anak Krakatau, which he said had affected economic activity due to disruption to flights.
“Although not too significant, it does have implications for the Indonesian economy. We saw that flights from the 6th to the 7th were still closed,” he said.
He also said market players were awaiting a number of domestic economic data, including developments in foreign exchange reserves, retail sales, and the consumer confidence index.
Meanwhile, Permata Bank Chief Economist Josua Pardede said stronger-than-expected US labour data had increased the probability of a Federal Reserve policy rate hike at the Federal Open Market Committee (FOMC) meeting in September 2026.
US nonfarm payrolls rose by 162,000 in August 2026, far exceeding market expectations of 55,000 and the previous month’s revised figure of 21,000. The unemployment rate remained at 4.1 per cent.
“The stronger-than-expected US labour data has raised market expectations, reflected in pricing for a policy rate hike to around 60 per cent, from around 50 per cent, thereby supporting the strengthening of the US dollar,” Josua said.
He further predicted that the rupiah would trade in a range of Rp17,600 to Rp17,725 per US dollar on Monday.