TEMPO.CO, Jakarta - Indonesia's rupiah remained under pressure in Tuesday morning trading as growing geopolitical uncertainty and concerns over domestic economic conditions weighed on the currency.
The rupiah weakened by 54.5 points, or 0.31 percent, to Rp17,859 per U.S. dollar on Tuesday morning, compared with its previous close of Rp17,805 per dollar.
Rully Nova, an analyst at Bank Woori Saudara, said the rupiah's decline was largely driven by uncertainty surrounding efforts to resolve tensions between the United States and Iran.
According to Rully, the situation has strengthened the U.S. dollar index, pushing it closer to the key psychological level of 100, while also raising expectations of higher global oil prices.
"The rupiah is expected to remain under pressure in the Rp17,800–Rp17,950 range today, influenced by global geopolitical risks stemming from uncertainty over a potential U.S.-Iran agreement. This has pushed the dollar index higher and increased expectations of rising oil prices," Rully told ANTARA on Tuesday.
Domestic Concerns Add Pressure
Beyond geopolitical risks, Rully said markets remain focused on several domestic challenges, including the government's fiscal position, uncertainty over future policy direction, and persistent inflationary pressures.
These factors, he said, continue to limit the rupiah's room for recovery.
A similar assessment was offered by Lukman Leong, a currency analyst at Doo Financial Futures. He said the rupiah's weakness intensified after Iran announced it had suspended peace talks with the United States and planned to close the Strait of Hormuz, one of the world's most critical energy shipping routes.
Any closure of the strait could disrupt global oil supplies, drive up energy prices, and boost demand for safe-haven assets such as the U.S. dollar.
"The rupiah is likely to weaken further against the strengthening U.S. dollar following Iran's decision to halt peace negotiations with Washington and its plan to fully close the Strait of Hormuz," Lukman said.
In addition to geopolitical developments, stronger-than-expected U.S. manufacturing data has also supported the dollar.
"The dollar's gains are being reinforced by manufacturing data that exceeded market expectations," Lukman said, forecasting the rupiah to trade between Rp17,800 and Rp17,900 per dollar.
Read: Indonesian Manufacturing PMI Rebounds to Expansion Territory
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