Jakarta. Rupiah slipped further on Friday as geopolitical tensions and uncertainty over global energy flows kept investors on edge, despite signs of a temporary ceasefire in the Middle East.

The Indonesian currency closed 14 points weaker at Rp 17,106 per US dollar, trimming earlier losses after briefly sliding 30 points from the previous close of Rp 17,092.

Ibrahim Assuaibi, director at Traze Andalan Futures, said the rupiah remained under pressure as markets assessed Israel’s signals of a potential diplomatic dialogue with Iran, alongside disruptions to energy shipments through the Strait of Hormuz.

“Ship traffic through the strait remained well below 10% of normal volume on Thursday despite the ceasefire, as Tehran asserted control by warning vessels to stay within its territorial waters,” Ibrahim said in a written statement on Friday.

The rupiah also weakened following news of a two-week ceasefire agreement between Iran and the United States, mediated by Pakistan, as clashes reportedly continued even after the announcement.

On top of that, reports that Iran planned to impose fees on vessels passing through the Strait of Hormuz under the peace arrangement added to market unease, although Western leaders and a UN shipping body have rejected the proposal.

“Markets are now awaiting key US consumer inflation data due on Friday, which could provide further clues on the Federal Reserve’s policy direction. Economists expect headline CPI to rise amid a surge in energy prices linked to the Middle East conflict,” Ibrahim added.

The combination of geopolitical risks and inflation uncertainty is expected to keep pressure on the rupiah in the near term.

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