The Rupiah Is Predicted To Weaken Driven By Concerns Of The US Trade War

Dollars and rupiah (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Thursday, February 13, 2025 is expected to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Wednesday, February 12, 2025, the rupiah spot exchange rate was closed slightly up 0.02 percent to the level of Rp. 16,376 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.09 percent to a price level of Rp. 16,364 per US dollar.

Currency Observer Ibrahim Assuaibi said investors were still digesting the imposition of higher trade rates by President Donald Trump this week, which is expected to have the potential to support inflation and burden economic growth in the coming months.

"Trump has hinted at his intention to impose more rates," he said in his statement, quoted Thursday, February 13.

Ibrahim said Federal Reserve Chair Jerome Powell was further lowering expectations for cutting interest rates.

Powell told the Senate Banking Committee on Tuesday that the Fed was in no hurry to cut interest rates, given that the Fed had cut interest rates by 1 percent by 2024, and the economy remained strong.

According to Ibrahim, from a January policy meeting, where the central bank maintains a fixed interest rate and hints at a little intention to cut interest rates further in the near future.

Meanwhile, from within the country, Indonesia's economy in the first quarter of 2025 is estimated to remain stable with growth of around 4.98 percent to 5 percent, one of the driving factors for utamnaya is domestic consumption and investment.

Ibrahim conveyed that policy support for the middle class, as well as it is important to strengthen the Consumption economy, it still tends to be flat, as evidenced by the net condition that the balance bank is still negative.

"This shows that consumers have spent their savings to maintain current consumption levels, which cannot continue continuously. This phenomenon occurs especially in middle to lower households," he said.

As for this year, there are several programs that have been implemented by the government. For example, free nutritious food (MBG), an increase in the Provincial Minimum Wage (UMP) of 6.5 percent, a number of stimulus packages such as a 50 percent electricity discount for two months (January-February 2025) for electricity customers with an installed power of up to 2,200 VA, policies for MSMEs, and others.

In line, in the first quarter of 2024 there is also the momentum of Ramadan, which usually encourages the pace of household consumption.

Ibrahim said that the MBG program that has been implemented has not seen a significant impact because this program is still gradual and has not been realized 100 percent.

According to Ibrahim, the MBG program will indeed encourage related sectors, such as logistics, packaging, food and drinks. However, because it has not been running optimally, the program will only contribute 0.1 percent to economic growth in the first quarter of 2025.

In addition, Ibrahim said that export performance is also expected to stagnate in growth, and will grow slowly compared to imports. A similar incident occurred last year, where imports actually hampered the push for economic growth in that year.

Ibrahim estimates that the rupiah will fluctuate but close lower on trading Thursday, February 13, 2025, in the price range of IDR 16,360 - IDR 16,430 per US dollar.