Jakarta. Indonesia’s rupiah edged higher on Thursday, extending gains in the first trading week after the Eid holiday, as markets reacted cautiously to geopolitical signals from the Middle East.

The rupiah closed up 7 points against the US dollar at Rp 16,904, after earlier strengthening by as much as 15 points from the previous close of Rp 16,895.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah’s appreciation came amid ongoing diplomatic developments between the United States and Iran over tensions in the Middle East.

“Markets are weighing temporary diplomatic signals from Tehran, where officials are reportedly reviewing a US-backed proposal aimed at easing the dispute,” Ibrahim said on Thursday.

Still, he noted that uncertainty remains elevated as Iran has publicly denied engaging in direct negotiations with Washington, highlighting lingering differences that continue to cloud market sentiment.

“The lack of clarity has kept traders cautious, with oil markets subdued on Thursday,” he added.

Despite this, the rupiah managed to strengthen even as global oil prices remained volatile in recent weeks. Brent crude surged above $119 per barrel earlier this month on fears of supply disruptions.

Ibrahim said the Strait of Hormuz, a critical passage for roughly one-fifth of global oil shipments, remains a key market focus, with any disruption likely to trigger further price spikes.

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