Jakarta. Rupiah weakened further on Monday, hovering just below the psychologically key Rp 17,000 per dollar level as escalating Middle East tensions and surging global oil prices weighed on emerging market currencies.

By Monday afternoon, the rupiah traded around Rp 16,997 per US dollar, after briefly touching Rp 17,006, edging closer to the Rp 17,000 threshold.

Currency observer Ibrahim Assuaibi said the rupiah remained under pressure from geopolitical tensions involving the United States, Israel, and Iran, which have pushed global oil prices sharply higher.

“The tensions continue between Iran, the United States, and Israel, with both sides carrying out retaliatory attacks,” Ibrahim said on Monday.

Beyond geopolitics, the rupiah is also facing pressure from expectations surrounding the US Federal Reserve’s monetary policy, as markets anticipate the possibility of higher interest rates.

The prospect of tighter US policy has intensified after oil prices surged toward $100 per barrel, driven in part by the blockade of the Strait of Hormuz, a critical shipping lane that carries roughly 20% of global oil supply.

Ibrahim added that efforts to stabilize the market may not immediately ease oil prices.

“The IEA (International Energy Agency) plans to release 400 million barrels of oil, and Russia is also expected to supply additional crude to the market. However, these measures appear insufficient to bring global crude prices down,” he said.

“As a result, there is still a possibility that oil prices could climb further to around $130 per barrel.”