Jakarta. Rupiah pared its opening losses against the US dollar on Thursday as investors weighed Middle East tensions, US rate expectations and renewed domestic concerns over protests in Jakarta and falling public approval of the government.

The rupiah closed 19 points, or 0.11%, weaker at Rp 17,744 per dollar after opening down 56 points, or 0.32%, at Rp 17,781. The US dollar index was stable at 99.16. On Wednesday, the rupiah closed two points, or 0.01%, weaker at Rp 17,725 per dollar.

Traze Andalan Futures Director Ibrahim Assuaibi said the rupiah remained under pressure from global factors, particularly developments in the Middle East, oil prices and expectations for the Federal Reserve's monetary policy.

Markets are watching hopes that talks involving Iran and Qatar could help reopen the Strait of Hormuz, a critical route for global energy trade. A reopening could ease concerns over supply disruptions stemming from the conflict in the Middle East.

Iran and Oman are reportedly finalizing details of an agreement on control of the Strait of Hormuz. The development came after Iran's Islamic Revolutionary Guard Corps said the two countries had agreed on the allocation of access and revenue from the waterway, which links major Gulf oil producers to global markets.

Qatar's prime minister was scheduled to travel to Iran on Thursday to resume diplomatic talks aimed at ending the conflict, which has lasted nearly six months.

The US had previously halted strikes on Iran for about a month while seeking to increase economic pressure on Tehran, raising market hopes that disruptions to energy supplies from the Gulf could ease.

Ibrahim, however, warned that geopolitical risks remained high, as the two sides remained far apart over the terms for ending the conflict. Iran has also said the Strait of Hormuz would not be reopened until the US meets Tehran's demands.

In the US, investors were also assessing the latest Personal Consumption Expenditures (PCE) data. Core PCE inflation, which excludes food and energy prices, held steady at 3.3% year-on-year in July, in line with market expectations.

On a monthly basis, headline and core PCE both rose 0.2% in July. The data followed relatively moderate US Consumer Price Index and Producer Price Index readings.

Markets will next focus on weekly US initial jobless claims and a speech by Federal Reserve Governor Kevin Warsh at the Jackson Hole Symposium on Friday.

On the domestic front, investors were monitoring demonstrations outside the House of Representatives, or DPR, building in Jakarta.

"The demonstration remained orderly and peaceful, with several lawmakers meeting protesters to hear their demands," Ibrahim said.

Protesters from several groups, including the Pati United People's Alliance (AMPB), called on the DPR to immediately pass the Asset Forfeiture Bill and impose the death penalty on corruptors.

The demonstration ended peacefully after lawmakers received the protesters' demands and pledged to continue overseeing deliberations on the Asset Forfeiture Bill until the Dec. 15, 2026 deadline for its passage.

Ibrahim also pointed to a sharp decline in public satisfaction with the Prabowo Subianto-Gibran Rakabuming Raka administration as another domestic concern.

A Tempo Data Science survey conducted from July 31 to Aug. 11 showed public satisfaction with the government at 37 percent in August, down from 58 percent in March and 75 percent in December 2025. Economic issues were among the main factors behind the decline, with prices of basic necessities cited as the biggest source of dissatisfaction.

"For Friday's trading, the rupiah is expected to remain volatile with a tendency to weaken, moving in the range of Rp 17,740 to Rp 17,790 per dollar," Ibrahim said.

As of 3:59 p.m. Jakarta time, Bloomberg data showed the Singapore dollar at Rp 13,961, the Japanese yen at Rp 111.36, the Australian dollar at Rp 12,746 and the euro at Rp 20,679.

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