Rupiah Struggles to Hold Gains Amid Oil Price Volatility

The Indonesian rupiah has struggled to hold onto its gains after breaching Rp 18,000 against the US dollar. On Tuesday, it closed at Rp 17,981 per US dollar, down from Rp 17,978 in the previous session.

Elevated oil prices due to geopolitical tensions and expectations of further US monetary tightening are weighing on the currency. According to Ibrahim Assuaibi, director of Traze Andalan Futures, the rupiah is expected to fluctuate within a range of Rp 17,980 to Rp 18,030 per US dollar in Wednesday's trading.

Assuaibi noted that high oil prices are raising concerns about Indonesia's fiscal balance and prompting markets to factor in the possibility of further monetary tightening by the US Federal Reserve. CME FedWatch data showed a 70% chance of another rate hike at the Fed's October meeting, following hawkish remarks from US central bank officials last week.