Rupiah Potentially Strengthens To Rp16,200 Per US Dollar Amid Geopolitical Tensions

Rupiah (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Friday, June 13 is expected to move higher against the United States (US) dollar.

To note, citing Bloomberg, on Thursday, June 12, the rupiah spot exchange rate closed up 0.11 percent to the level of Rp. 16,242 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.17 percent to a price level of Rp. 16,237 per US dollar.

Currency observer Ibrahim Assuaibi said the escalating tensions in the Middle East, particularly between Iran and Israel, after several reports said Israel was preparing to attack Iran if nuclear negotiations with the US were successful.

"On Wednesday, Trump confirmed that the US was also withdrawing personnel from Iraq and other Middle Eastern countries, amid fears of further military action," he said in a statement, quoted Friday, June 13.

In addition, US President Trump said on Wednesday that the trade framework with China was "complete," depending on his approval and President Xi Jinping.

Meanwhile, the agreement grants Chinese export licenses for rare earth minerals and magnets, while the US will allow sustainable access for Chinese students.

Ibrahim added Washington would maintain a total rate of around 55 percent for Chinese imports, with China maintaining a rate of 10 percent for American goods.

According to him, Trump is open to extending the deadline, but predicts it will not be necessary.

"This development reduces some trade concerns, but global asset movements indicate that the decision has been taken into account. In addition, the market has previously seen Trump change its stance on tariffs," he explained.

Meanwhile, from within the country, Ibrahim conveyed that the results of the Bank Indonesia survey showed public optimism for spending or spending as reflected in the Consumer Confidence Index for economic conditions decreased as of May 2025.

Meanwhile, the Consumer Confidence Index (IKK) in May 2025 remains at an optimistic level (index >100) of 117.5.

Although the downing IKK still indicates consumer confidence in economic conditions is maintained optimistic, this figure is lower than April's 121.7.

The Consumer Survey conducted on 4,600 household respondents in 18 cities. This survey is early information regarding household consumption, inflation expectations, and household financial conditions.

IKE and IEK were recorded at 106.0 and 129.0, although lower than the previous month's index which was recorded at 113.7 and 129.8, respectively.

Looking at the results of the survey in detail, consumer confidence in May 2025 decreased in all expenditure groups. The deepest decline in respondents with expenditures of IDR 4.1 million to IDR 5 million with IKK which continued 7.5 points to 117.7.

People who are included in the lowest expenditure category, namely Rp. 1 million to Rp. 2 million, actually experienced a thinner decrease in IKK by 2.4 points to the level of 112.3.

Meanwhile, consumer perceptions of current economic conditions (IKE) remain optimistic, although lower than the previous month, still supported by the Goods Income Index and the Goods Durable Purchase Index (IPDG) which were at an optimistic level of 118.1 and 104.1, although lower than the previous period of 125.4 and 113.9.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading Friday, June 13, 2025 in the price range of IDR 16,200 - IDR 16,250 per US dollar.