Market Anticipates Central Bank Meeting, Rupiah Predicted to Weaken

US and Rupiah dollars (Photo: Antara)

JAKARTA - The rupiah exchange rate on Tuesday, March 18, is expected to weaken against the US dollar.

As reported by Bloomberg, on Monday, March 17, the spot rupiah exchange rate closed down 0.34 percent to IDR16,406 per US dollar. Meanwhile, the rupiah exchange rate at Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (Jisdor) closed up 0.07 percent to IDR16,379 per US dollar.

Currency observer Ibrahim Assuaibi said that geopolitical turmoil in the Middle East is increasing after the US launched a wave of airstrikes against Houthi rebels in Yemen in retaliation for their attacks on shipping lanes in the Red Sea.

"However, this trend has been undermined by some signs of progress in the Russia-Ukraine ceasefire negotiations, with President Donald Trump stating that he will speak with Russian President Vladimir Putin on Tuesday," he said in his statement, quoted on Tuesday, March 18.

Earlier, US President Donald Trump on Sunday night repeated his threat of reciprocal and sectoral tariffs to be imposed on April 2 - a move widely expected to escalate the ongoing global trade war.

But markets are uncertain about how committed Trump will be to the tariffs, given that he reversed measures against Canada and Mexico earlier this month.

Ibrahim said the two countries, along with China and the European Union, outlined retaliatory measures against the US, and were expected to impose stricter measures to counter Trump's retaliatory tariffs.

He said concerns about trade disruptions and a potential spike in inflation due to tariffs were fueling fears of a US recession.

"The market focus this week is on anticipating a series of central bank meetings this week, especially the Federal Reserve, Bank of Japan, and Bank of England. The US industrial production and retail sales dates are also set to provide more clues about the world's largest economy," he said.

Meanwhile, domestically, the Central Statistics Agency (BPS) reported that Indonesia's trade balance in February 2025 recorded a surplus for 58 consecutive months since May 2020 of USD3.12 billion.

The trade balance surplus in February 2025 was lower than the previous month, but higher than the same month last year.

Meanwhile, the trade balance surplus in February 2025 was supported by a surplus in non-oil and gas commodities of 4.84 billion US dollars. Contributed by animal/vegetable fats and oils, mineral fuels, and iron and steel.

Meanwhile, the trade balance for oil and gas commodities showed a deficit of 1.72 billion US dollars, mainly commodities contributing to the deficit, namely oil and crude oil.

The value of Indonesia's exports in the February 2025 period was recorded at 21.98 billion US dollars or an increase of 2.58 percent compared to January 2025 which was around 21.43 billion US dollars. Meanwhile, year on year (yoy) Indonesia's exports rose 14.05 percent compared to February 2024, which was 19.27 billion US dollars.

Indonesia's import value in February 2025 reached 18.86 billion US dollars, up 5.18 percent compared to January 2025, which was recorded at 17.94 billion US dollars. Meanwhile, when compared to February 2024, this month's import performance was recorded to have increased by 2.30 percent.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading on Tuesday, March 18, 2025 in the price range of IDR16,390 - IDR16,450 per US dollar.