Markets Await President Prabowo's State Speech, Rupiah Projected to Strengthen

Illustration (Photo: Doc. ANTARA)

JAKARTA - The rupiah exchange rate is expected to weaken against the United States (US) dollar on Friday, August 15th.

Citing Bloomberg, on Thursday, August 14th, the spot rupiah closed up 0.54 percent to IDR 16,115 per US dollar. Meanwhile, the rupiah exchange rate, according to Bank Indonesia's (BI) Jakarta Interbank Spot Dollar Rate (Jisdor), closed up 0.79 percent to IDR 16,109 per US dollar.

Currency observer Ibrahim Assuaibi stated that the latest US inflation data reinforces expectations that the Federal Reserve (Fed) will cut interest rates at its September monetary policy meeting.

"The latest US Consumer Price Index (CPI) report showed that monthly headline inflation in July rose in line with expectations, while the annual inflation rate fell slightly below expectations," he said in a statement quoted on Friday, August 15th.

Meanwhile, Ibrahim noted that a more significant development occurred in the core CPI, which excludes food and energy.

He added that the monthly and annual increases were slightly above projections, underscoring ongoing inflationary pressures. However, despite the mixed results, the market is optimistic as the report provides evidence of only a modest surge in consumer prices due to President Trump's recently announced new import tariffs.

He stated that mild inflation, combined with signs of a cooling labor market, has strengthened market expectations for a September interest rate cut, with the CME FedWatch Tool now estimating a 95 percent probability of a 25 basis point rate cut.

Meanwhile, domestically, Ibrahim stated that the market is awaiting President Prabowo Subianto's State Address, including the Financial Note and the 2026 State Budget Bill, which will be officially delivered on Friday, August 15th.

The President's address will provide a clear picture of the state budget posture and the government's priority programs next year.

President Prabowo is scheduled to deliver two state addresses at the commemoration of the 80th Anniversary of Indonesian Independence on Friday, August 15th, at the People's Consultative Assembly (MPR) and House of Representatives (DPR) Buildings in Senayan, Jakarta.

The first address is scheduled for 9:00 a.m. Western Indonesian Time (WIB) before the People's Consultative Assembly (MPR), which will discuss the government's performance report for nearly 300 days, or nearly 10 months.

The second state address will be held at 2:30 p.m. Western Indonesian Time (WIB) before the House of Representatives (DPR RI) Plenary Session, to deliver an introduction to the 2026 Draft State Budget (RAPBN).

Ibrahim predicts the rupiah will fluctuate but close higher on Friday, August 15, 2025, trading in the range of IDR 16,060 to IDR 16,120 per US dollar.