Jakarta. Rupiah is expected to stay under pressure on Thursday, with geopolitical tensions and shifting Fed expectations keeping the currency on a weakening bias despite Bank Indonesia’s steady policy stance.

The rupiah closed down 38 points against the US dollar on Wednesday afternoon at Rp 17,181, after briefly sliding as much as 45 points from its previous level of Rp 17,142.

“On Thursday, the rupiah is likely to move within a volatile range but close weaker at around Rp 17,180–Rp 17,220,” said Ibrahim Assuaibi, director at Traze Andalan Futures.

He pointed to lingering uncertainty over US–Iran peace negotiations as a key external driver, alongside concerns over potential disruptions in the Strait of Hormuz, a critical chokepoint that carries about 20% of global oil and LNG supply.

Market sentiment is also being shaped by comments from Kevin Warsh, a potential Federal Reserve chair nominee, who stressed the importance of central bank independence.

“The former Fed governor is seen as less dovish than markets had expected, but also signals the possibility of major policy shifts at the central bank if confirmed,” Ibrahim said.

Domestically, the rupiah remains vulnerable even after Bank Indonesia held its benchmark rate at 4.75%, while keeping the deposit facility at 3.75% and the lending facility at 5.5%.

The central bank said the decision aligns with efforts to strengthen monetary operations and stabilize the rupiah amid worsening global economic conditions driven by the Middle East conflict.