Rupiah Weakens as Trump-Xi Summit Fails to Address US-Iran Conflict
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- The Indonesian rupiah depreciated to Rp 17,630 against the US dollar on Monday, driven by a global risk-off sentiment and a massive sell-off across various asset classes.
- Investor disappointment stemmed from the recent Trump-Xi summit, which focused heavily on bilateral ties but failed to offer concrete solutions to the escalating US-Iran conflict and Tehran’s nuclear program.
- The lack of a diplomatic breakthrough in the Middle East has caused global crude oil prices to surge, keeping currency markets volatile and placing further downward pressure on emerging market currencies like the rupiah.
JAKARTA, INDONESIAN POST — The rupiah weakened by 33 points, or 0.19 percent, to trade at Rp 17,630 against the United States dollar on Monday morning, down from its previous close of Rp 17,597.
Doo Financial Futures currency analyst Lukman Leong attributed the currency’s depreciation to the recent summit between US President Donald Trump and Chinese President Xi Jinping, which largely bypassed solutions to the ongoing US-Iran conflict.
“The rupiah has the potential to weaken further in response to the global risk-off sentiment observed on Friday. The US dollar strengthened significantly amid a massive sell-off across all asset classes—including bonds, equities, cryptocurrencies and fiat currencies—driven by investor disappointment over the Trump-Xi meeting’s failure to address or resolve the US-Iran war,” Lukman told Antara news agency in Jakarta on Monday.
During the bilateral talks, Beijing urged the immediate reopening of the Strait of Hormuz while maintaining the current ceasefire.
Chinese Foreign Minister Wang Yi stated that his country was continuously striving to promote peace and facilitate negotiations. He emphasized that Beijing would maintain its active role in de-escalating the conflict and restoring stability in the Middle East.
Despite these efforts, Iranian Foreign Minister Abbas Araghchi noted that while the Pakistan-led mediation with the US had not entirely collapsed, it was navigating a “very difficult path.” He cited deep-seated mistrust of Washington and contradictory messages from the US administration as primary hurdles.
Araghchi reaffirmed Tehran’s commitment to diplomacy, even amid what he described as a “shaky” ceasefire following the recent military confrontations involving the US, Israel and Iran.
Meanwhile, as reported by Anadolu Agency, Trump expressed doubt that a swift agreement would be reached with Iran. Negotiations concerning Tehran’s nuclear program and the ongoing hostilities have continued without yielding any definitive resolution.
Multiple media outlets suggest that the US president is expected to decide within the next few hours whether to resume military strikes against the Iranian regime, given that talks aimed at ending the conflict and curbing Iran’s nuclear ambitions have so far stalled.
This geopolitical tension has driven global crude oil prices back up. Although Washington and Beijing agreed on several cooperative measures, the positive market response was overshadowed by mounting fears of surging oil prices.
“Both countries and the international community want the war to end. However, it seems highly unlikely that Iran will abandon its nuclear ambitions. Consequently, the Trump-Xi summit focused more on bilateral relations,” Lukman observed.
Given these factors, the rupiah is projected to fluctuate between Rp 17,550 and Rp 17,650 against the greenback.
Antara | Indonesian Post
