The Rupiah Has Strengthened Due To A De-escalation In Geopolitical Tensions

Doo Financial Futures currency analyst Lukman Leong predicts that the exchange rate of the rupiah will strengthen as geopolitical tensions ease.

"The rupiah continues to be influenced by external sentiments and is expected to appreciate against the US dollar amid a risk-on sentiment due to the de-escalation of geopolitical situations," he stated to ANTARA in Jakarta on Wednesday.

On Monday (June 23), United States President Donald Trump announced that Israel and Iran had agreed to a "total and comprehensive" ceasefire amid rising tensions in the Middle East.

The ceasefire took effect on Tuesday (June 24) at 04:00 GMT (11:00 WIB). Trump urged both parties to adhere to the agreement.

However, on Tuesday morning, Israeli Defense Minister Israel Katz ordered a massive attack on Iran, claiming that Iran had violated the agreement. Iran denied these allegations and vowed to retaliate if attacked again.

On Monday, Iran also launched missiles at the Al Udeid Air Base, which is operated by the US military in Qatar, following a US strike on three Iranian nuclear sites on Sunday (June 22).

"Indeed, the situation in the Middle East remains highly uncertain, but at least the circumstances are significantly better than the previous fears of large-scale mutual attacks," Lukman remarked.

On the other hand, the strengthening of the rupiah is limited in light of the hawkish statements made by Federal Reserve Chairman Jerome Powell.

"Powell stated that inflation has not yet reached the target and could potentially rise in the future due to interest rates," he remarked.

Considering these factors, the exchange rate of the rupiah is predicted to range between Rp16,250 and Rp16,350 per US dollar.

The exchange rate of the rupiah at the opening of trading on Wednesday morning in Jakarta strengthened by 98 points or 0.60 percent, reaching Rp16,256 per US dollar, up from Rp16,354 per US dollar previously.

Tag: Donald Trump Lukman Leong Rupiah