Combination Of External Pressure And Domestic Policy Uncertainty Drag Rupiah To Level Rp16,749 Per US Dollar

JAKARTA - The rupiah exchange rate moved lower against the United States (US) dollar in trading Thursday, September 25, 2025.

To note, citing Bloomberg, on Thursday, September 25, 2025, the rupiah spot exchange rate closed down 0.39 percent to the level of Rp. 16,749 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.43 percent to a price level of IDR 16,752 per US dollar.

President Commissioner of HFX International Futures Sutopo Widodo explained that the weakening of the rupiah against the US dollar was the result of complex interactions between global and domestic factors.

From a global perspective, speculation regarding the direction of the Federal Reserve (The Fed) monetary policy is one of the main drivers.

Sutopo explained the market had anticipated a reduction in the US benchmark interest rate (FFR) in the near future, however, the Fed's latest statement obscured the expectations and strengthened the value of the US dollar.

"The Fed's prospects may retain higher interest rates for a longer period of making the dollar a more attractive asset, thus naturally reducing the exchange rate of other currencies, including the rupiah. Thus, global concerns about the direction of US monetary policy are one of the main triggers," he told VOI, Thursday, September 25.

In addition, according to him, domestic factors in Indonesia also make a significant contribution to the weakening of the rupiah.

From within the country, he said, Bank Indonesia's monetary easing policy, including cut interest rates, contributed to the weakening of the rupiah, although it aims to boost economic growth, this policy makes rupiah less competitive for investors looking for high returns.

In addition, Sutopo explained that a number of domestic issues are also in the market spotlight, such as concerns about Bank Indonesia's independence after the program of sharing burdens with the government, as well as more expansionary fiscal plans under the new government including a budget deficit target that is slightly higher than the initial estimate.

According to Sutopo, all of these things add to the risk perception that erodes market confidence in domestic currency stability.

"It is very inappropriate to only see one single cause. The weakening of the rupiah that occurred during the past week was not purely a result of one factor, but a combination of the two," he said.

Dia menyampaikan, nilai tukar rupiah yang berada di bawah tekanan berasal dari sisi eksternal karena penguatan dolar yang didorong oleh kebijakan The Fed, dan pada saat yang sama, menghadapi tantangan internal dari kebijakan moneter yang longgar dan kekhawatiran fiskal.

Menurutnya, sinergi dari faktor global dan domestik inilah yang secara kolektif menciptakan kondisi yang mendorong rupiah ke level terendah baru, dan menjadikan mata uang kinerja terburuk di Asia dalam periode ini dan memicu intervensi berulang dari Bank Indonesia.

He said the rupiah exchange rate under pressure came from the external side due to dollar strengthening driven by the Fed's policies, and at the same time, facing internal challenges from loose monetary policy and fiscal concerns.

According to him, the synergy of global and domestic factors is what collectively creates conditions that push the rupiah to new lows, and make the worst performance currency in Asia in this period and trigger repeated interventions from Bank Indonesia.