Jakarta. Rupiah extended its rally on Thursday, closing 92 points, or 0.52%, stronger at Rp 17,748 against the US dollar as falling US Treasury yields and positive domestic sentiment outweighed lingering concerns over the prolonged disruption in the Strait of Hormuz.

The currency had closed at Rp 17,840 on Wednesday.

Traze Andalan Futures Director Ibrahim Assuaibi said global markets remained focused on the prolonged deadlock in the Strait of Hormuz after US President Donald Trump signaled that Washington would impose additional stringent economic restrictions on Iran.

“Markets are bracing for a prolonged deadlock in the Strait of Hormuz after President Donald Trump said Washington would impose additional strict economic restrictions on Iran,” Ibrahim said in a statement Thursday.

Iran has already been under tight US sanctions targeting its oil exports, while Washington has imposed a naval blockade on the country amid the ongoing conflict.

The rupiah continued to strengthen as benchmark US Treasury yields fell, with the 10-year yield dropping more than 5 basis points and the 30-year yield declining nearly 9 basis points.

The move came after the US Treasury Department announced plans to increase the volume of its buyback operations to support liquidity in longer-dated government securities.

The local currency also gained after the Federal Reserve’s July meeting minutes showed that many policymakers saw the possibility of raising interest rates if inflation failed to ease.

At home, the rupiah drew further support from a positive market response to the Indonesian government's plan to significantly cut subsidized fuel quotas in 2027.

As of 3:59 p.m. Jakarta time, Bloomberg data showed the Singapore dollar at Rp 13,969, the Japanese yen at Rp 111.97, the Australian dollar at Rp 12,643, and the euro at Rp 20,773.

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