The Rupiah Strengthens In Line With Expectations Of A Ceasefire In The Middle East

Permata Bank's Chief Economist Josua Pardede stated that the strengthening of the rupiah is supported by an increase in expectations for a ceasefire in the Middle East. 

"The strengthening of the rupiah is bolstered by the growing expectations for a ceasefire between Israel and Iran in the Middle East," he told ANTARA in Jakarta on Wednesday. 

United States President Donald Trump had previously announced that a ceasefire between the two parties would commence around 04:00 GMT (11:00 WIB), with Iran expected to halt its operations first to end the 12-day conflict, following a 24-hour period. 

Iran's Foreign Minister Abbas Araqchi mentioned that there is no "agreement" regarding the ceasefire between Iran and Israel. However, he indicated that Iran would be prepared to cease further retaliatory attacks if Israel stops its strikes by 04:00 Tehran time (07:30 WIB) on Tuesday (June 24). 

The ceasefire comes after Iran launched a series of missiles at the U.S. Military Base Al Udeid in Qatar on Monday (June 23) in retaliation for the U.S. attack on Iran's nuclear facilities over the past weekend. 

"This risk-on sentiment also supports the trend of declining yields on government bonds (SBN) by 6 basis points on Wednesday," Josua remarked. 

Tomorrow, the rupiah is expected to continue its strengthening in line with anticipated declines in U.S. sales data. 

"The weakening of U.S. data is expected to further enhance expectations for a quicker rate cut by the Fed," he stated. 

Based on these factors, the rupiah is predicted to range between Rp16,225 and Rp16,325 per U.S. dollar on Thursday (June 26). 

The exchange rate of the rupiah at the close of trading on Wednesday in Jakarta strengthened by 54 points or 0.33 percent to Rp16,300 per U.S. dollar from Rp16,354 per U.S. dollar previously. 

The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia today also strengthened to Rp16,292 per U.S. dollar from Rp16,370 per U.S. dollar previously. 

Tag: Josua Pardede Middle East Rupiah