Indonesian rupiah strengthens beyond Rp17,700 per US dollar
JAKARTA, Thekabarnews.com—The Indonesian rupiah climbed past the psychological level of 17,700 per US dollar. It extended gains and distanced itself from the 18,000 level that had been a drag on the...
JAKARTA, Thekabarnews.com—The Indonesian rupiah climbed past the psychological level of 17,700 per US dollar. It extended gains and distanced itself from the 18,000 level that had been a drag on the currency recently.
The rupiah continued to benefit from broad weakness in the US dollar, with an improved global market mood cheering investors.
The US Dollar Index (DXY) dropped 0.18 percent to 99.569 as demand for the greenback waned in international markets, according to CNBC Indonesia.
Reports that the United States and Iran had reached a framework for a peace agreement after months of conflict in the Middle East triggered the dollar’s decline.
Signs that geopolitical tensions might ease prompted investors to cut their holdings of the US dollar. The dollar, which is usually considered a safe haven during uncertain times, fell in value.
Demand for the dollar eased, prompting investors to shift to riskier assets and emerging market currencies. As a result, the rupiah was allowed to gain further against the US currency.
Indonesia’s stock market rose on positive global sentiment. At 10:14 a.m. WIB, the Jakarta Composite Index (IHSG) climbed to 6,249.90. It gained 242.24 points, or 4.03 percent, from the previous trading session’s close.
The rally further boosted the positive momentum of the domestic stock market in the last few trading days.
Confidence in Indonesia’s economic outlook grew and conditions in global financial markets improved, prompting investors to keep buying shares.
The strength of the rupiah was also a sign of renewed investor confidence in Indonesia’s macroeconomic fundamentals.
A stronger domestic currency can help reduce imported inflation, lower the cost of foreign-denominated debt and support broader financial stability. However, market participants remain attentive to external risks that could affect future capital flows.
Investors, meanwhile, were awaiting developments on the proposed US-Iran peace deal and upcoming economic data. They also looked for monetary policy cues from major central banks, especially the US Federal Reserve.
These factors are likely to shape the US dollar and world financial markets in the coming weeks.
The rupiah could retain its gains if global risk sentiment stays positive and the US dollar continues to weaken. Meanwhile, Indonesia’s equity market could continue to draw foreign capital inflows.
But currency and equity markets will remain sensitive to geopolitical developments and shifts in global monetary policy, market participants warn.
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