Jakarta. Rupiah slipped back into negative territory on Monday, Dec. 22, as global risk sentiment weakened amid rising geopolitical tensions and firmer oil prices.

The currency closed down 27 points against the US dollar in afternoon trading after earlier weakening by as much as 40 points to Rp 16,777, compared with the previous close of Rp 16,750.

Traze Andalan Futures Director Ibrahim Assuaibi said the rupiah came under pressure following a rebound in global oil prices driven by renewed geopolitical concerns.

“Concerns over escalating geopolitical tensions in the Middle East have pushed oil prices higher, after weekend reports said Israel plans to brief the US on new attacks against Iran,” Ibrahim said in a written statement on Monday.

Global geopolitical uncertainty also intensified after reports that the US was preparing to seize a third oil tanker off the coast of Venezuela, amid rising tensions between Washington and Caracas after US President Donald Trump ordered a blockade on sanctioned Venezuelan oil tankers. The development added further pressure on the rupiah.

The currency also weakened ahead of a series of US economic data releases scheduled for Dec. 23, with markets facing thinner liquidity due to the shorter trading week ahead of the Christmas holiday.

“Traders will be digesting the four-week average ADP employment change, third-quarter growth figures, October durable goods orders, as well as industrial production data for October and November,” Ibrahim said.

From the domestic side, Ibrahim noted that the rupiah entered negative territory amid weakening middle-class purchasing power, food inflation risks, and declining foreign investment outside the downstream sector.

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