Rupiah Predicted Weakening At The Level Of Rp16,500 Impact Of Trump's Trade War

JAKARTA - The rupiah exchange rate in trading Tuesday, February 4, 2025 is expected to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Monday, February 3, 2025, the rupiah spot exchange rate was closed down 0.87 percent to a level of IDR 16,448 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed lower by 0.86 percent to a price level of IDR 16,453 per US dollar.

Currency Observer Ibrahim Assuaibi said Trump imposed a 25 percent tariff on Canadian and Mexican imports, along with a 10 percent import duty in China.

"The three countries rejected the tariff and vowed to retaliate. Trump delivered the tariff last week, before signing an executive order enacting it on Saturday," he said in a statement, quoted on Tuesday, February 4.

In addition, Canada responded quickly by applying a 25 percent return rate against imports from the US.

Meanwhile, China strongly criticized the policy, although it still paved the way for dialogue with the US so that the conflict would not worsen.

Then, Trump hit China with an import rate of 10 percent a move that is a bad sign for China's export-dependent economy.

In its official statement, China's Ministry of Finance and Trade said it would file a lawsuit against Trump's tariff policy at the World Trade Organization (WTO).

In addition, China warned it would take undefined countermeasures, which are scheduled to take effect on Tuesday.

Meanwhile, from within the country, there are serious concerns over the import tariff policies imposed by the United States (US) on China, Canada, and Mexico.

This policy has a major impact on the global economy, so the government needs to be careful and evaluate the rupiah exchange rate against the US dollar in the State Revenue and Expenditure Budget (APBN) which is currently pegged at IDR 16,000.

Previously, President Donald Trump announced a 25 percent tariff for imports from Canada and Mexico, as well as an additional 10 percent for goods from China. This policy received sharp criticism and threats of countermeasures from the three countries.

The rising trade war tension has also caught the attention of the government and Bank Indonesia, considering that its economy is very dependent on international trade.

Therefore, it is important to understand the impact of US tariff policies on the economy, especially in dealing with potential inflation spikes.

The trade war that occurred could make it even more difficult for Indonesia to export.

Because, when the trade war occurs, the country will reduce production that has an impact on Indonesia as the exporter of raw materials.

In addition, the trade war can also make other countries target Indonesia in importing a number of goods that were previously sent to the US or China.

This takes advantage of Indonesia's economic openness.

In addition, this trade war weakens Indonesia's exports which then has an impact on Indonesia's trade balance.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading on Tuesday, February 4, 2025, in the price range of Rp. 16,430-Rp. 16,500 per US dollar.