Jakarta. The Indonesian rupiah depreciated against the US dollar in Tuesday's trading session, driven by escalating tensions between Iran and Israel, coupled with uncertainty surrounding the delay in the US Federal Reserve's interest rate cut.

According to Bloomberg data, the rupiah weakened to Rp 16,170 per dollar, marking a decline of 322.0 points (2.03 percent) compared to the previous session.

"Concerns over the postponed US interest rate cut and heightened geopolitical tensions have bolstered the US dollar while putting pressure on the rupiah," financial analyst Ariston Tjendra said on Tuesday.

He emphasized that the Middle East conflict, particularly Iran's actions against Israel, has heightened market apprehensions of a potential new war, which could disrupt supplies, elevate inflation, and hinder global economic growth.

Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (Celios), warned that the Israel-Iran conflict might cause the rupiah to weaken to Rp 17,000.

"The escalation in oil prices could widen energy subsidies, thereby leading to the depreciation of the rupiah exchange rate," explained Bhima Yudhistira on Sunday. "Consequently, the rupiah may weaken to Rp 17,000 per US dollar, from the current level of Rp 15,000."

US consumer prices remained elevated last month due to increased costs in gas, rents, auto insurance, and other items. This development is likely to give pause to the Federal Reserve as it assesses the frequency or necessity of interest rate cuts this year.

Additionally, market movements were influenced by the release of China's first-quarter gross domestic product (GDP) data.

China's economy surpassed expectations in the first quarter, benefiting from supportive policies and heightened demand, as reported by the government on Tuesday.

The world's second-largest economy expanded by 5.3 percent annually in January-March, outpacing analysts' forecasts of around 4.8 percent. Compared to the previous quarter, growth increased by 1.6 percent.

Meanwhile, following the extended Eid holiday break, the Composite Stock Price Index (IDX) opened lower on Tuesday, declining by 176.132 points (2.42 percent) to reach 7,110. Although the initial decline moderated, the index remained in negative territory.

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