Jakarta. Rupiah hovered near a record low on Thursday and could move closer to Rp 18,000 per US dollar when markets reopen on Friday, as rising geopolitical tensions and surging oil prices intensify pressure on Indonesia’s currency.

According to Bloomberg data at 3 p.m. Jakarta time, the rupiah stood at Rp 17,845 per US dollar during the Idul Adha market holiday.

Currency observer Ibrahim Assuaibi said both global and domestic factors were driving negative sentiment toward the rupiah. “External and domestic factors are both strongly supporting the rupiah’s weakening,” Ibrahim said on Thursday.

He warned the currency could continue to slide in the next trading session and approach the psychological Rp 18,000 level.

“There is a possibility that when the market opens on Friday, the rupiah could move closer to Rp 18,000 per US dollar,” he said.

Ibrahim said escalating geopolitical tensions in the Middle East and Eastern Europe were pushing global investors toward safe-haven assets such as the US dollar.

“The geopolitical situation in the Middle East is becoming increasingly tense,” he said.

He added that tensions around the Strait of Hormuz could disrupt global energy trade routes and trigger another spike in oil prices.

“This could create further tensions in the Strait of Hormuz and push oil prices higher,” Ibrahim said.

The ongoing Russia-Ukraine conflict has also continued to fuel global uncertainty and weigh on emerging-market currencies, he added.

“Tensions in both Europe and the Middle East have pushed global oil prices back above $92 per barrel, and now they are around $96 per barrel,” Ibrahim said.

Higher oil prices have increased Indonesia’s demand for dollars to pay for energy imports, while the greenback has also strengthened on expectations that the Federal Reserve will keep interest rates elevated for longer.

“The central bank’s main concern right now is inflation, rather than weakening labor market conditions,” he said.

Domestically, Ibrahim said strong demand for dollars for oil imports, dividend payments, foreign exchange needs, and continued capital outflows were adding to pressure on the rupiah.

“The rupiah’s weakness is also being driven internally, especially by sharply higher oil prices and strong dollar demand due to large oil imports,” he said.

He said Bank Indonesia had already intervened aggressively to stabilize the rupiah, but simultaneous external and domestic pressures continued to leave the currency vulnerable.

“Bank Indonesia has intervened as strongly as possible, but the scale of the external and internal pressures is very significant,” Ibrahim said.

According to Ibrahim, the rupiah could weaken toward Rp 17,900 per US dollar by the end of Thursday’s trading and edge closer to Rp 18,000 at Friday’s opening.