Rupiah Weakens as US Threatens to Extend Naval Blockade Against Iran

Jakarta (ANTARA) - The rupiah exchange rate closed lower on Thursday, weakening by 20 points or 0.12 per cent to Rp17,346 per US dollar from the previous close at Rp17,326 per US dollar. Currency and commodity economist Ibrahim Assuaibi attributed the decline to US President Donald Trump’s preparations for a prolonged naval blockade against Iran. “Concerns over this scenario are exacerbated by reports that several leading US oil executives met with Trump at the White House to discuss how to limit the conflict’s impact on American society,” he said in a written statement in Jakarta on Thursday. A prolonged naval blockade is seen as likely to prompt Iran to continue blocking the Strait of Hormuz in retaliation, indicating a greater disruption to global oil supplies. However, a report on Wednesday (29/1) indicated that Trump is seeking help from other countries to form a new international coalition to reopen the waterway. “Trump has repeatedly asked other countries to help reopen Hormuz, although the US’s main allies have largely refused to assist. He has been seen criticising NATO members for not providing military help to the US and Israel during the conflict,” he said. Negotiations between the US and Iran have largely failed amid disagreements over Iran’s nuclear activities. Although Trump has extended the ceasefire with Iran indefinitely, he added, both sides have largely rejected any efforts to mediate talks. The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia on Thursday also moved lower to Rp17,378 per US dollar from the previous Rp17,324 per US dollar.