Rupiah Weakens on Reports of Iranian Attack on US Forces

The rupiah exchange rate weakened by 16 points, or 0.09 percent, to Rp18,099 per US dollar on Wednesday morning, compared to the previous close of Rp18,083 per US dollar. Doo Financial Futures analyst Lukman Leong stated the rupiah weakened alongside reports of an Iranian attack on US forces in the Middle East. “The rupiah is expected to weaken against the US dollar, with crude oil prices surging again following news of an attack by Iran on US forces in the Middle East,” he said. Citing Anadolu, US Central Command (CENTCOM) said on Tuesday that Iran’s Islamic Revolutionary Guard Corps (IRGC) launched several ballistic missiles towards US forces stationed in the Middle East. The statement came after local media reported that Iran launched missiles towards a US military base in Jordan. Tensions between the US and Iran have escalated in recent weeks, as the US carried out attacks on Iran, which then responded by targeting US military facilities and equipment in Gulf region countries. Another sentiment stems from the Federal Open Market Committee (FOMC) agenda today, which is predicted to maintain interest rates. “However, the market anticipates a hawkish tone from the Fed Chair. This will certainly also burden the rupiah,” Lukman said. According to him, the hawkish statement may revolve around world oil prices rising high again, which is feared will trigger another increase in US inflation. Looking at domestic sentiment, it is expected to remain negative following the resignation of Perry Warjiyo as Governor of Bank Indonesia. Based on these factors, the rupiah is predicted to move in the range of Rp18,000 to Rp18,100 per US dollar.