16 Jun 2025 | News & Feature

TFP W25 2025: Oil swings, exchange rate jabs

  • The recent spike in oil prices may reflect a heightened conflict premium due to the Iran-Israel tensions, especially considering that the oil market was heading toward oversupply before the conflict.
  • Even a modest increase in oil prices could significantly affect US inflation readings, potentially prompting the Fed to adopt a more hawkish stance in the upcoming FOMC meeting.
  • Given the revenue shortfall and the weakening Rupiah, even a moderate rise in oil prices could still pose a threat to Indonesia’s fiscal balance.