Rupiah Movement Potentially Weakening, Driven By External Factors

US and Rupiah dollars (Photo: dock. Antara)

JAKARTA - Analysts estimate that the rupiah exchange rate is expected to weaken against the United States (US) dollar in trading Monday, November 25.

Quoting Bloomberg, the Rupiah exchange rate on Friday, November 22, the rupiah spot exchange rate rose 0.35 percent to Rp15,875 per US dollar. Meanwhile, Jisdor's rupiah exchange rate rose 0.19 percent daily to a price level of Rp15,911 per US dollar.

Currency Observer and Commodity Observer Lukman Leong said that the movement of the rupiah is expected to weaken against the US dollar by war concerns in Ukraine and the Middle East.

"The election of Scott Bessent, who is known as hawkish US dollars as finance minister, also pressed the rupiah," Lukman explained in his statement, Monday, November 25.

Lukman estimates that the rupiah has the potential to weaken in the price range of IDR 15,850 per US dollar IDR 15,950 per US dollar in trading Monday, November 25.

Similarly, the Director of PT. Forexindo Berjangka Forexindo Ibrahim Assuaibi expressed hope that the rate reduction route had been reduced, although unstable, in recent weeks.

"The market expects a 25-base-point interest rate drop of 52 percent at a Fed meeting in December, down from 82.5 percent a week ago, according to CME's FedWatch Tool," he explained.

A Reuters poll shows most economists expect the Fed to cut interest rates at a December meeting, with a shallower drop in 2025 than expected a month ago due to higher inflation risk than Trump's policy.

Additionally, the latest comments from Fed officials, including Jerome Powell's chairman, have shown that the central bank is slow and measurable in its rate-depletion pathway.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Monday, November 25, 2024, in the price range of IDR 15,920 - IDR 16,000 per US dollar.