Rupiah weakens as US-Iran conflict escalates

The rupiah in today’s trading is expected to weaken within the range of Rp17,900 to Rp18,000, influenced by the global factor of escalating geopolitical conflict, which has resulted in rising oil prices and a strengthening dollar index.

Jakarta (ANTARA) - The rupiah exchange rate moved 56 points or 0.31 per cent lower on Monday morning to Rp17,977 per US dollar, compared with the previous close of Rp17,921 per US dollar.

Bank Woori Saudara analyst Rully Nova said the rupiah weakened amid the escalation of geopolitical conflict between the United States and Iran.

“The rupiah in today’s trading is expected to weaken within the range of Rp17,900 to Rp18,000, influenced by the global factor of escalating geopolitical conflict, which has resulted in rising oil prices and a strengthening dollar index,” she told ANTARA in Jakarta on Monday.

Quoting Sputnik, the US Central Command (CENTCOM) announced the start of a new series of American attacks against Iran.

According to a report by Anadolu, Iran then responded by launching a large-scale drone attack on two US military installations in Kuwait. The Iranian military said it had struck an ammunition warehouse at Camp Al Adiri, as well as a Patriot missile system and air defence radar installation at Ali Al Salem Air Base.

Looking at domestic sentiment, market players expect Bank Indonesia (BI) to raise its benchmark interest rate to 6 per cent at the BI Board of Governors Meeting (RDG) on Wednesday (22/7) as a pre-emptive measure against inflation.

“The main reasons for the benchmark rate hike include inflation, the rupiah exchange rate, and stock market volatility, in line with reviews by global rating agencies,” said Rully.