Rupiah Potentially Weakens To Level Rp16,340 Per US Dollar

Rupiah and US Dollars (Photo: dock. Antara)

JAKARTA - The rupiah exchange rate in trading Wednesday, August 27 is expected to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Tuesday, August 26, the rupiah spot exchange closed down 0.24 percent to the level of Rp. 16,299 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.14 percent to a price level of Rp. 16,277 per US dollar.

Currency observer Ibrahim Assuaibi said a number of analysts estimated the Fed would cut the benchmark interest rate by 25 basis points next month.

"Powell in his speech at Jackson Hole last week confirmed the risk to the US labor market is getting higher, although inflation is still a threat," he said in his statement, quoted Wednesday, August 27.

On the other hand, market participants are starting to realize that the opportunity to cut interest rates is not yet entirely certain.

Ibrahim conveyed that important economic data such as Core PCE this week, labor reports (NFP) next week, and inflation (CPI) in August will determine the policy direction of the Fed.

According to him, this situation encourages hedging and makes the dollar strengthen again widely.

In addition to the direction of monetary policy, market participants are also observing the political dynamics in the US. President Donald Trump has again criticized Powell and the Fed's ranks, even reportedly considering steps to replace Powell.

However, White House economic adviser Kevin Hassett said the replacement process took months.

Meanwhile, from within the country, Ibrahim said that Bank Indonesia estimates that Indonesia's economic growth throughout 2025 can reach 5.1 percent, even higher.

This optimism is supported by economic performance in the second quarter of 2025 which recorded growth of 5.12 percent year on year (yoy), better than the first quarter of 2025 which grew 4.87 percent.

Ibrahim said that improving economic growth was supported by several factors, one of which was export performance which would continue to improve, government spending which would continue to expand, thus encouraging domestic demand.

Then, investment in a number of sectors continues to increase, especially those oriented to exports. In addition, the transportation, warehousing, and agricultural equipment industries as well as investment in a number of strategic projects will also continue to grow.

BI will continue to pay close attention to the space for lower interest rates to encourage higher economic growth in accordance with the national economic capacity in line with the low inflation forecast and maintain the stability of the rupiah exchange rate in the future amid of course global uncertainty.

In addition, the policy synergy between the government and BI will continue to be strengthened to maintain the momentum of government spending growth and BI continues to maximize the combination of monetary, macropudential and payment systems policies to support economic growth while maintaining inflation and stability of the rupiah exchange rate.

Ibrahim estimates that the rupiah will fluctuate but closed lower in trading on Wednesday, August 27, 2025, in the price range of IDR 16,290 - IDR 16,340 per US dollar.