Rupiah Hits Record Low Amid Middle East Conflict Fears

Rupiah Slides to Record Low as Middle East Conflict Fuels Oil and Inflation Fears

The Indonesian rupiah extended its decline against the US dollar on Friday, pressured by escalating tensions in the Middle East, rising oil prices, and expectations surrounding the Federal Reserve's interest-rate policy.

According to Bloomberg data, the rupiah weakened 64 points, or 0.36%, to Rp 17,611 per US dollar from Rp 17,547 on Thursday. Traze Andalan Futures Director Ibrahim Assuaibi said the prolonged geopolitical tensions surrounding the US-Iran conflict in the Middle East continued to weigh on market sentiment.

The intensifying conflict and disruption risks around the Strait of Hormuz have raised concerns over another surge in global oil prices, potentially adding to inflationary pressures. Domestic pressures also contributed to the rupiah's decline, with rising oil prices above $100 per barrel increasing fiscal risks for Indonesia as a net oil importer.

'Today, the market's focus will turn to the US Consumer Price Index, which will be released at 7:30 p.m. Jakarta time,' Ibrahim said.