Tuesday's Rupiah Is Predicted To Strengthen Amid US Trade War Concerns

Illustration. (Photo: Doc. Antara)

JAKARTA - The rupiah exchange rate in trading Tuesday, February 18, 2025 is expected to move higher against the United States (US) dollar.

To note, citing Bloomberg, on Monday, February 17, 2025, the rupiah spot exchange closed up 0.14 percent to the level of Rp. 16,228 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed higher by 0.47 percent to a price level of Rp. 16,208 per US dollar.

Currency Observer Ibrahim Assuaibi said traders were cautious amid fears of trade war and supply due to the announcement of US trade rates last week reviving fears of a global trade war, which could dampen economic growth and reduce crude demand.

Meanwhile, Trump said he might soon meet with Russian President Vladimir Putin to discuss stopping the Ukraine war.

"Trump emphasizes his efforts for peace and the belief that the two leaders want to stop fighting," Ibrahim said in his statement, quoted on Tuesday, February 18.

Ibrahim said this week that the financial market is preparing to closely monitor a series of speeches from Federal Reserve officials, starting with Federal Open Market Committee members Patrick Harker and Michelleatur.

"Their perspective is highly anticipated following various inflation data last week, which revealed an annual increase of 3 percent in the Consumer Price Index (JCI) for January, slightly above the 2.9 percent level of the previous month," he said.

According to Ibrahim, the unexpected increase in inflation has further dampened expectations of short-term interest rate cuts.

Meanwhile, from within the country, the Central Statistics Agency (BPS) reported that throughout January 2025, Indonesia's trade balance had a surplus of 3.45 billion US dollars, 1.21 billion US dollars higher than the previous month and 1.45 billion US dollars higher than the same month last year.

On the other hand, Indonesia has experienced a trade balance surplus for 57 consecutive months since December 2020.

Indonesia's export value in the January 2025 period was recorded at 21.45 billion US dollars, down 8.56 percent compared to December 2024 which amounted to 23.46 billion US dollars. Meanwhile, year on year (yoy) Indonesia's exports rose 4.68 percent compared to January 2024 of 20.49 billion US dollars.

Meanwhile, if viewed on an annual basis, oil and gas exports fell from 1.06 billion US dollars in January 2024 to 1.40 billion US dollars in January 2025. Then the annual value of non-oil and gas exports rose from 20.40 billion US dollars in January 2024 to 19.10 billion US dollars in January 2025.

Indonesia's import value in January 2025 reached 18 billion US dollars or a decrease of 15.18 percent compared to December 2024 which was recorded at 21.22 billion US dollars. Meanwhile, when compared to January 2024, this month's import performance was recorded to have decreased by 2.67 percent.

yoy, oil and gas imports fell from USD 2.70 billion in January 2024 to USD 2.48 billion in January 2025. Meanwhile, non-oil and gas imports yoy fell from USD 15.80 billion in January 2024 to USD 15.52 billion in January 2025.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading on Tuesday, February 18, 2025, in the price range of IDR 16,180 - IDR 16,230 per US dollar.