Global Oil Prices Drop: How Is the Rupiah Faring? - Tempo.co English

TEMPO.CO, Jakarta - Doo Financial analyst Lukman Leong said the rupiah's strengthening against the US dollar was driven by a significant drop in global oil prices.

On Wednesday, September 30, the rupiah opened stronger, rising 56 points (0.31 percent) against the US dollar to Rp17,925, up from the previous close of Rp17,981.

“This strengthening was supported by a significant drop in global oil prices following news that Saudi Arabia had resumed half of its crude oil exports via the East-West pipeline,” he said on Wednesday, as quoted by ANTARA.

Citing Anadolu, oil prices fell amid signs of improving supplies from the Middle East, including the resumption of Saudi Arabian oil exports via the East-West Pipeline following repairs to damage caused by a drone attack.

Increasing tanker traffic through the Strait of Hormuz has helped ease concerns about short-term supply.

International Brent crude oil prices fell 2.8 percent—or US$2.94—to US$102.35 per barrel, while West Texas Intermediate (WTI) crude oil futures dropped US$3.50, or 3.8 percent, to US$89 per barrel.

As the rupiah approaches the psychological level of Rp18,000, Bank Indonesia is reportedly intervening again in the spot, Non-Deliverable Forward (NDF), and Domestic Non-Deliverable Forward (DNDF) markets.

Similarly, Permata Bank Chief Economist Josua Pardede noted that the rupiah's depreciation had eased since the previous close, coinciding with a decline in global oil prices. “Today, the rupiah is expected to move within the range of Rp17,925–Rp18,025 per US dollar,” he said.