Jakarta. Rupiah remained under pressure in the red zone on Tuesday, weighed down by escalating geopolitical tensions and lingering domestic liquidity issues.

In Tuesday afternoon trading, the rupiah closed 10 points weaker against the US dollar, reversing earlier gains after briefly strengthening by 5 points to Rp 16,787 from the previous close of Rp 16,777.

Ibrahim Assuaibi, director at Traze Andalan Futures, said the currency came under pressure amid rising geopolitical risks involving the United States and Venezuela, after reports that the US Navy attempted to seize a third oil tanker linked to the South American country.

The rupiah was also dragged lower by renewed tensions in the Middle East, as Iran–Israel frictions resurfaced following reports that Iran could be using large-scale military exercises as a potential cover for offensive operations.

Looking ahead, Ibrahim said markets continued to price in further monetary easing by The Federal Reserve through 2026, supported by signs of cooling inflation and a weakening US labor market.

He added that market attention was focused on a series of key US indicators, including the four-week average of ADP employment changes, the delayed third-quarter gross domestic product report, durable goods orders, industrial production, and consumer confidence data.

On the domestic front, the rupiah was further pressured after Bank Indonesia disclosed that undisbursed loans, credit facilities yet to be drawn by borrowers, reached Rp 2,500 trillion as of November 2025.

Ibrahim noted that both corporates and households remained cautious about taking on new loans amid uncertainty over the economic outlook. He added that while the central bank had rolled out extensive incentives to support banks, demand-side credit growth still needed a stronger push.

Meanwhile, Financial Services Authority viewed the persistently high level of undisbursed loans as an indication of ample credit headroom, which could be tapped by borrowers to finance future business expansion.