Rupiah Is Predicted To Weaken Due To External Sentiment

Illustration (Photo: Doc. ANTARA)

JAKARTA - The rupiah exchange rate in trading Wednesday, January 8, 2025 is expected to weaken against the United States (US) dollar.

Quoting Bloomberg, on Tuesday, January 7, 2025, the rupiah spot exchange rate was closed higher by 0.34 percent to the level of Rp. 16,143 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.15 percent to a price level of IDR 16,169 per US dollar.

Director of PT Profit Forexindo Berjangka Ibrahim Assuaibi projects that the rupiah will weaken again.

This is in line with comments from the Fed Governor, Lisa Cook, who said that the Fed was able to be careful with further cut in interest rates considering the economy is at a stronger footing and inflation is stronger than expected.

"Various Fed policymakers are scheduled to speak this week, and are likely to echo the latest comments from other Fed officials that there is still a need to combat a stubborn inflation rate," he said in a statement, quoted Wednesday, January 8.

Additionally, the Washington Post reports that Trump's aides are exploring plans that will impose tariffs on each country but only on sectors deemed critical to US national security or economy, easing concerns about tougher and wider levies.

Trump on Monday denied a Washington Post report that his government would only target important imports at trade rates.

President-elect Trump has pledged to impose high import rates to further dominate US trade, particularly over China, but Trump's reports and comments sparked growing uncertainty over Trump's policy of global trade.

Meanwhile, from within the country, the market responded positively to Indonesia joining the Brazilian, Russian, Indian, Chinese and South African groups (BRICS) is a strategic step that can increase Indonesia's bargaining position in the global arena. In particular, in the eyes of the Organization for Economic Co-operation and Development (OECD).

Ibrahim said that Indonesia is a potential economic force in Asia, this potential must be unlocked by taking a more daring stance.

"The decision to join BRICS will actually increase Indonesia's bargaining position in the eyes of OECD, which so far seems to be positioned as not on par with other countries," he explained.

Ibrahim said that regarding the denOLization agenda, which is one of the BRICS agenda, this phenomenon will naturally occur along with the decline in US economic dominance.

According to Ibrahim, the role of the US economy in the world, although it will remain important, tends to decline due to the emergence of new forces such as China, India, Russia, Brazil, Mexico, or even Indonesia.

"The de-dollarization trend will occur more in the context of trade between BRICS members, as China and Russia have implemented by using local currencies for 90 percent of their export-import transactions," he explained.

However, Ibrahim said that creating a global alternative currency or a replacement transfer system for SWIFT may be very difficult.

However, Ibrahim conveyed Indonesia's membership in BRICS to open up opportunities for cooperation in various fields, such as technology, food security, and climate change.

"This is a strategic step to expand the influence and strengthen Indonesia's position in the international arena," he explained.

Ibrahim estimates that the rupiah will fluctuate but closed lower in trading on Wednesday, January 8, 2025, in the price range of Rp. 16,130 - Rp. 16,200 per US dollar.