Global Pressure Shadows the Rupiah, the US Dollar is Still Strong

JAKARTA - The rupiah exchange rate on Thursday, December 18, 2025 is predicted to weaken against the US dollar.

To note, quoting Bloomberg, on Wednesday, December 17, the spot rupiah exchange rate closed down 0.02 percent to the level of Rp16,694 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of the Bank Indonesia (BI) closed down 0.03 percent at the price level of Rp16,698 per US dollar.

Money market observer Ibrahim Assuaibi said that various economic data in the United States, especially the non-farm payroll report and the unemployment rate, which is at its highest level in the last four years, have raised concerns about the prospects for the US economy.

Ibrahim said the indication of the slowing economy of the Uncle Sam's country was increasingly visible from the December purchasing managers' index (PMI) data which was lower than the projection.

In addition, he added that the delayed release of October retail sales data also reflected a slower growth rate compared to the previous month.

"This weak data comes amid lingering concerns about the level of liquidity in the US market, especially after the Federal Reserve resumed its government bond-buying activity, called quantitative easing, in December," he said in a statement, quoted Thursday, December 18.

On the other hand, he added that market participants' attention is now focused on the release of consumer price index (CPI) inflation data scheduled to be released on Thursday.

According to him, the data will be scrutinized to see the indication of a decrease in inflationary pressure while providing a further picture of the world's largest economic condition.

From within the country, the Bank Indonesia Board of Governors Meeting decided to maintain the BI Rate reference interest rate at the level of 4.75 percent in December 2025.

Meanwhile, the deposit facility rate remained at 3.75 percent and the lending facility at 5.5 percent.

This decision is in line with the 2025-2026 inflation projection which is still maintained within the target range of 2.5 percent plus minus 1 percent, as well as an effort to maintain the stability of the rupiah exchange rate in the midst of high global uncertainty and supporting economic growth.

Ibrahim assessed that Bank Indonesia needs to maintain the policy interest rate at the level of 4.75 percent at the last RDG in 2025, while being vigilant and ready to take anticipatory steps to maintain the stability of the rupiah.

According to him, this consideration is supported by the slowing annual inflation from 2.86 percent to 2.72 percent in November 2025, although it is still in the upper range of the BI target of 1.5-3.5 percent.

He added that the Fed's reduction in the Fed Funds Rate combined with BI's policy of maintaining interest rates has encouraged the inflow of foreign capital into the domestic financial market.

Ibrahim predicted that the rupiah would move fluctuatio but closed weaker on Thursday, December 18, 2025 in the price range of Rp16,690 - Rp16,720 per US dollar.