Rupiah Potentially Strengthens To Rp16,230 Per US Dollar Amid Global Uncertainty

JAKARTA - The rupiah exchange rate in trading Thursday, July 17 is expected to move higher against the United States (US) dollar.

To note, citing Bloomberg, on Wednesday, July 16, the rupiah spot exchange rate closed down 0.12 percent to the level of Rp. 16,287 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed slightly lower by 0.04 percent to a price level of Rp. 16,288 per US dollar.

Currency observer Ibrahim Assuaibi said that market concerns continue over US President Donald Trump's trade rates.

"The increasing uncertainty over the independence of the Federal Reserve, amid growing calls from Trump and his allies to overthrow Jerome Powell, which has seen increasing their call for Powell to step down and for interest rates to drop," he said in a statement, quoted Thursday, July 17.

In addition, he said that the main Consumer Price Index (JCI) data for June was slightly higher than expected. Despite the slight increase, the figure remains higher than the previous month, sparking fears that inflation rates are at risk of stagnation.

Ibrahim said that the IHK index also comes amid growing concerns over the impact of inflation from Trump's trade rates and the Fed has warned that it will maintain interest rates until further clarity on the impact of Trump's rates.

On the other hand, President Trump continued the threat of his new tariff ahead of August 1 deadline and his recent actions were aimed at Indonesia, with plans to impose an import duty of 19 percent.

"Although the recent tariff threat has not had a major impact on market movements in general, traders refrain from placing big bets amid uncertainty," he said.

Meanwhile, from within the country, Ibrahim said that global economic uncertainty had increased after the reciprocal tariff policy applied by Trump to major trading partner countries such as Indonesia, which were still quite large, due to import rates of 19 percent, although previously 32 percent.

Therefore, with global economic uncertainty, Bank Indonesia (BI) again cut the benchmark interest rate or BI rate by 25 bps to 5.25 percent in July 2025.

Then, the Deposit Facility interest rate also fell to 4.5 percent and the Lending Facility interest rate fell to 6 percent.

As for this is the third interest rate cut this year, BI previously cut interest rates by 25 bps in May.

Ibrahim explained that based on BI's statement the decision was consistent with the lower inflation in 2025 and 2026 at a target of 2.5 percent plus minus 1 percent, and maintained stability in the rupiah exchange rate and the need to encourage economic growth.

"In the future, BI will continue to pay close attention to the space for lower interest rates to encourage economic growth by maintaining the stability of the rupiah exchange rate and achieving inflation targets in accordance with the increase that occurred globally domestically," he added.

Ibrahim estimates that the rupiah will fluctuate but close higher on trading Thursday, July 17, 2025, in the price range of IDR 16,230 - IDR 16,290 per US dollar.