The Rupiah Is Predicted To Weaken Due To Trump's Policy Pressure

JAKARTA - The rupiah exchange rate in trading Friday, February 28, 2025 is expected to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Thursday, February 27, 2025, the rupiah spot exchange rate closed down 0.44 percent to the level of Rp. 16,454 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed lower by 0.26 percent to a price level of Rp. 16,431 per US dollar.

Currency Observer Ibrahim Assuaibi said the release of US consumer confidence data that was weaker than expected for February, raised concerns over slowing private consumption.

"Private spending is the main driver of the US economy, and is facing pressure from Trump rates, high inflation, and rising food prices," he said in his statement, quoted Friday, February 28.

According to him, traders are betting that the cooling US economy will give the Federal Reserve more push to cut interest rates, which is a bad sign for the dollar.

In addition, Treasury returns also fell due to this idea, with Trump's tariff threats that tend to benefit the dollar not helping much greenback.

However, US President Donald Trump threatened to impose more global trade rates, after Trump said a 25 percent rate against Europe would soon apply and signaled a potential March 2 deadline extension for 25 percent import duty against Canada and Mexico, until early April.

Meanwhile, from within the country, President Prabowo Subianto targets Indonesia's very ambitious economic growth of 8 percent in 2029 to be stated in the 2025-2029 National Medium-Term Development Plan (RPJMN) in the Presidential Regulation of the Republic of Indonesia (RI) Number 12 of 2025.

Economic growth in 2025 is targeted at 5.3 percent, higher than the assumption in the 2025 State Budget of 5.2 percent, in 2026 economic growth is targeted to grow 6.3 percent, grow to 7.5 percent in 2027, grow to 7.7 percent in 2028, and grow to 8 percent in 2029.

Based on the large development targets for the next five years, the government will encourage macroeconomic policies to be supported by adaptive fiscal, monetary and structural reform policies.

Meanwhile, improving the quality of development will be a capital for Indonesia in achieving high economic growth that is inclusive and sustainable. Inclusive growth is reflected through reducing poverty levels, and the Gini ratio as an indicator of inequality.

Furthermore, strengthening class roles is a strategic step to encourage high economic growth and achieve high-income status in 2045.

The middle class proportion (aspiring middle class and middle class) which includes 72.20 percent of the total population has contributed 82.30 percent to national household consumption by 2023.

According to him, increasing the proportion of the middle class will encourage the poor and vulnerable to poverty to be completed to fill the middle class.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Friday, February 28, 2025 in the price range of Rp. 16,440 - Rp. 16,500 per US dollar.