Rupiah has the opportunity to strengthen in the midst of easing US-European tensions

JAKARTA - The rupiah exchange rate on Thursday, January 22, 2026 is expected to strengthen against the US dollar.

To note, quoting Bloomberg, on Wednesday, January 21, the spot rupiah exchange rate closed up 0.12 percent to Rp16,936 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of the Bank Indonesia (BI) closed up 0.11 percent to a price level of Rp16,963 per US dollar.

Doo Financial Futures analyst Lukman Leong assessed that the rupiah has the opportunity to strengthen as tensions between the United States and Europe subside after President Donald Trump withdrew the threat of imposing tariffs on the region.

"The rupiah has the potential to strengthen against the US dollar by easing US-European tensions after Trump withdrew the threat of tariffs to Europe," he told VOI, Thursday, January 22.

However, he added that the potential for strengthening is still limited because domestic sentiment is not yet solid, especially regarding concerns about the independence of the Bank of Indonesia, the budget deficit, and the prospect of a decline in the benchmark interest rate.

"However, the strengthening may be limited given that domestic sentiment is still weak due to concerns about BI's independence, budget deficits and the prospect of interest rate cuts by BI," he said.

Lukman estimates that the movement of the rupiah on Thursday, January 22, 2026 will be in the range of Rp16,850-Rp17,000 per US dollar.

Meanwhile, money market observer Ibrahim Assuaibi, revealed that Bank Indonesia decided to maintain the benchmark interest rate (BI Rate) at the level of 4.75 percent in January 2026, as well as the deposit facility interest rate remained at 3.75 percent and the lending facility at the level of 5.5 percent.

According to him, this policy is considered consistent in maintaining the stability of the rupiah in the midst of global uncertainty, while strengthening the transmission of monetary and macroprudential policies to support stability and encourage economic growth in the future.

"Despite maintaining interest rates in January, BI still emphasizes that the room for interest rate cuts is wide open. However, the decline will be accompanied by inflation estimates this year which are in the target of 2.5 percent plus minus 1 percent," he explained.

Ibrahim predicted that the rupiah would move fluctuatio on Thursday, January 22, 2026 in the price range of IDR 16,930 - IDR 16,950 per US dollar.