Rupiah Predicted To Strengthen To Rp16,700 Per US Dollar

US Dollar Rupiah (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Wednesday, April 30 is expected to move higher against the United States (US) dollar.

To note, citing Bloomberg, on Tuesday, April 29, the rupiah spot exchange rate was closed up 0.56 percent to the level of Rp. 16,761 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed up 0.44 percent to a price level of Rp. 16,787 per US dollar.

Currency observer Ibrahim Assuaibi said the United States (US) would soften the impact of its automotive tariffs by reducing some of the duties imposed on foreign parts in domestically produced cars.

"The adjustment means that car manufacturers who pay Trump's automotive tariffs will be exempted from additional duties, such as steel and aluminum," he said in his statement, quoted Wednesday, April 30.

In addition, US Treasury Secretary Scott Bessent stated that all aspects of the US government are in touch with China and it is up to China to defuse the situation. This happened after Beijing previously denied any talks.

Meanwhile, Chinese policymakers pledged to support US high-rate businesses and workers and called for preparations for the worst-case scenario.

"However, they did not announce any additional action beyond what was disclosed in their annual policy meeting in March. Data on China and Caixin's official manufacturing activities will be released on Wednesday, providing a first idea of how tariff measures impact the manufacturing sector," he explained.

Meanwhile, from within the country, Ibrahim said that Indonesia's economic growth in the first quarter of 2025 is expected to slow down, as state spending realizations are not yet optimal, which should be the main stimulus for the economy.

As for March 2025, the realization of state spending was recorded at IDR 620.3 trillion, only growing 1.37 percent on an annual basis (yoy) compared to the same period last year.

This slowdown was mainly due to the decline in central government spending by 3.37 percent (yoy) to Rp413.2 trillion. The contraction was triggered by a decrease in ministry/institutional spending (K/L) by 11.75 percent (yoy) to Rp217.1 trillion.

According to Ibrahim, the low realization of state spending puts negative pressure on economic growth in the first quarter of 2025.

Ibrahim conveyed that government spending, especially K/L spending, has so far played an important role as the main driver of economic activity through development projects and procurement of goods and services.

"The rise in spending realization in the midst of economic conditions that have not fully recovered, the rise in layoffs (PHK), as well as rising prices for basic commodities due to domestic and global market pressures," he said.

In addition, he said that government spending is very crucial to maintain people's purchasing power, create jobs, and drive the real sector.

Based on this data, economic growth in the first quarter of 2025 is estimated to be only in the range of 4.5 percent to 4.75 percent, lower than the growth in the fourth quarter of 2024 which reached 5.02 percent. Previously, the initial projection for economic growth in the first quarter of 2025 was in the range of 4.5 percent to 5.0 percent.

Ibrahim estimates that the rupiah will fluctuate but close higher in trading on Wednesday, April 30, 2025 in the price range of IDR 16,700 - IDR 16,770 per US dollar.