Rupiah Potentially Under Pressure, Markets Remain Constrained by New Policies and Global Tensions

JAKARTA - The rupiah exchange rate is expected to weaken against the United States (US) dollar on Wednesday, September 24th.

Citing Bloomberg, on Tuesday, September 23rd, the spot rupiah closed 0.46 percent weaker at Rp16,688 per US dollar. Meanwhile, the rupiah exchange rate according to Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (Jisdor) closed down 0.17 percent at Rp16,636 per US dollar.

Currency observer Ibrahim Assuaibi stated that although US employment data shows weakness, opening the door to a 25 basis point interest rate cut by the Fed in October and possibly a total of 50 basis points by the end of the year, global sentiment remains negative.

"Even this still hasn't lifted positive sentiment towards the rupiah," he said in a statement quoted on Wednesday, September 24th.

Furthermore, Ibrahim stated that geopolitical tensions in Europe and the Middle East continue to loom large over the market.

He added that Russia is still launching attacks on Ukraine with drones and missiles, and has drawn condemnation from Western countries. Meanwhile, Israel continues to bombard Gaza, despite pressure from Arab countries such as Egypt, Qatar, and Saudi Arabia.

Meanwhile, Ibrahim stated that the political situation in the US is also heating up after a federal court dismissed a lawsuit filed by former President Donald Trump.

Trump then filed another lawsuit against Fed Chair Lisa Cook, demanding her removal from office. This political tension is predicted to continue escalating until the official announcement from the Attorney General, scheduled for October.

"He wants Lisa Cook fired because Trump himself is already preparing a replacement for her. But we must note that the Attorney General's announcement will likely be in October, so the political situation in America continues to heat up after Lisa Cook's rejection by the federal court," he said.

Meanwhile, domestically, Ibrahim stated that markets are still adjusting to the leadership transition from Sri Mulyani to Purbaya as Minister of Finance.

According to him, the policies implemented by Purbaya have not been fully accepted by the market, which previously highly appreciated Sri Mulyani's policy approach.

Furthermore, Ibrahim stated that the IMF's revision of Indonesia's economic growth projection from 4.7 percent to 4.8 percent should have been a positive catalyst for the rupiah. However, this was not strong enough to encourage a strengthening of the rupiah exchange rate.

"This should have raised positive sentiment towards the rupiah. But we see that the current conditions are not conducive to strengthening the rupiah," he explained.

Ibrahim predicted that the rupiah would fluctuate but close lower on Wednesday, September 24, 2025, in the price range of Rp16,720-Rp16,870 per US dollar.