JAKARTA - The rupiah exchange rate is expected to weaken against the United States (US) dollar on Thursday, July 31st.
Citing Bloomberg, on Wednesday, July 30th, the spot rupiah closed slightly higher by 0.02 percent to IDR 16,405 per US dollar. Meanwhile, the rupiah exchange rate based on Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (Jisdor) closed up 0.07 percent to IDR 16,387 per US dollar.
Currency observer Ibrahim Assuaibi reported that the United States and China agreed to extend the tariff truce for 90 days.
Ibrahim explained that this agreement was reached after what both sides described as constructive negotiations in Stockholm, aimed at defusing the escalating trade war between the two countries, which could threaten global economic growth.
"No major breakthroughs have been announced, and US officials have said that the decision to extend the trade truce that expires on August 12 or allow tariffs to spike back into triple digits rests with President Donald Trump," he said in a statement, quoted on Thursday, July 31.
Furthermore, Ibrahim conveyed growing market confidence that the Fed will maintain its benchmark interest rate and not commit to further easing, despite pressure from President Donald Trump to lower rates.
"Pressure from Trump could create friction among Fed policymakers. Governors Christopher Waller and Michelle Bowman are likely to vote against Powell's decision to maintain the benchmark interest rate," he explained.
Ibrahim said there are some signs of easing conditions in the labor market, which, coupled with further clarity on Trump's tariffs, could also make the Fed more open to eventually cutting the benchmark interest rate.
Meanwhile, domestically, Ibrahim stated that geopolitical escalation is a global challenge that has slightly hampered economic growth targets.
However, he stated that the government is optimistic and continues to accelerate household consumption, government spending, and investment through various stimulus measures as a short-term strategy to achieve the 5.2 percent economic growth target in 2025.
Therefore, he stated that the second half of 2025 must reach 5.4 percent to achieve the full-year target of 5.2 percent.
Ibrahim explained that the economic-boosting policy that will be boosted in the second half of 2025 is government consumption, particularly by accelerating the absorption of spending by ministries/institutions (K/L) with large budgets.
"Furthermore, government consumption contracted in the first quarter of 2025 (-1.38 percent) on an annual basis. This contraction was due to budget efficiency policies, but now the Ministry of Finance will give K/L the freedom to spend their budgets," he said.
He also stated that the government will boost investment by boosting the performance of Special Economic Zones, providing labor-intensive investment credit, expanding the FLPP (Housing Financing Liquidity Facility) program from a target of 220,000 to 350,000 housing units, implementing housing credit programs, and utilizing the Self-Help Housing Stimulus Assistance (BSPS) program.
Ibrahim stated that the government will also boost household consumption and purchasing power by optimizing the absorption of cash-for-labor programs and proposing an economic stimulus package for the tourism sector ahead of the Christmas and New Year holidays.
Ibrahim estimates that the rupiah will fluctuate but will close lower on Thursday, July 31, 2025, in the range of IDR 16,390-IDR 16,450 per US dollar.
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