Jakarta. Rupiah firmed against the US dollar at Tuesday’s close, managing modest gains despite lingering global uncertainty tied to geopolitics and the outlook for US monetary policy.

The currency strengthened by 17 points, or around 0.1%, to close at Rp 16,771 per dollar, improving from Monday’s finish at Rp 16,788. At the same time, the US dollar index slipped 0.02% to 98.01, giving some breathing room for emerging-market currencies.

Currency analyst Ibrahim Assuaibi said the rupiah’s movement reflected a tug-of-war between external pressures and domestic fundamentals.

On the global front, Ibrahim noted a renewed rise in geopolitical tensions after Russian President Vladimir Putin signaled Moscow would revise its negotiating stance on the Ukraine conflict following alleged drone attacks near his residence. “This statement adds uncertainty to the US-led peace efforts,” Ibrahim said on Tuesday.

Market sentiment was also weighed down by developments in the Middle East, after US President Donald Trump warned that Washington would strike Iran again if it attempts to rebuild its nuclear program. “This situation has also driven demand for safe-haven assets, including gold,” he added.

In Asia, risk sentiment weakened after China conducted nearly 10 hours of live-fire military drills around Taiwan, raising concerns over potential regional escalation.

Investors were also watching the release of minutes from the Federal Reserve’s December meeting, looking for clues on the central bank’s views on inflation, labor market conditions, and the future path of interest rates amid expectations of possible policy easing in 2026.

“However, the impact of the minutes is expected to be limited due to the lack of fresh economic data and thin trading volumes toward year-end. US markets will also be closed over the New Year holiday,” Ibrahim said.

Domestically, he acknowledged that Indonesia’s economy faced heavy pressure throughout 2025 from global uncertainty, geopolitical tensions, and the impact of US reciprocal tariffs announced in April, which at times dented market confidence and raised concerns over growth prospects.

Even so, Ibrahim said Indonesia’s economic resilience proved stronger than expected. Household consumption remained intact, while investment activity continued to show relatively solid growth, allowing economic expansion to stay above 5% despite global shocks.

“This resilience has been reinforced by a mix of fiscal and monetary policies that safeguard macroeconomic stability while supporting a sustainable economic recovery,” he said.Looking ahead to early next week, Ibrahim expects the rupiah to remain volatile, with potential closing levels in the Rp 16,770–16,800 per dollar range, citing limited fresh catalysts and persistently low market liquidity.

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