Rupiah weakens as global oil prices rise

The rupiah closed weaker against the US dollar, down 38 points or 0.22 percent, to Rp17,706 per US dollar from Rp17,668 previously. Rully Nova, an analyst at Bank Woori Saudara, said the rupiah’s weakness mirrors the trend of rising world oil prices, which have remained above $100 per barrel. He told ANTARA in Jakarta on Tuesday that domestic factors are weighing on the rupiah as markets await the outcome of the RDG BI (Rapat Dewan Gubernur Bank Indonesia) and as fiscal space remains tight due to subsidies swelling amid rising global oil prices. Citing Anadolu, commercial oil stocks are falling rapidly as inventories are dwindling to only a few weeks due to conflicts in the Middle East. Increased supply losses from the Strait of Hormuz reduce global oil stocks quickly, and price volatility could rise further. The RDG BI is expected to decide on a 25 basis point hike to 5 percent.