JAKARTA - The rupiah exchange rate in trading Tuesday, May 6 is expected to move lower against the United States (US) dollar.
To note, citing Bloomberg, on Monday, May 5, the rupiah spot exchange rate closed down 0.10 percent to the level of Rp. 16,455 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.43 percent to a price level of Rp. 16,421 per US dollar.
Currency observer Ibrahim Assuaibi expressed continued uncertainty over US trade rates, after President Donald Trump had no immediate plans to open a dialogue with his Chinese counterpart Xi Jinping.
"Trump hinted that the US is preparing to sign trade agreements with several countries, and that its government is in dialogue with China. However, the US-Chingkok trade deal is the largest point of uncertainty for the market, especially after both of them engaged in fierce trade wars and tariff exchanges until April," he said in his statement, quoted Tuesday, May 6.
In addition, China is evaluating the possibility of trade negotiations with the US, stating that any dialogue must be based on the sincerity and elimination of unilateral rates.
Meanwhile, investors are also moving cautiously ahead of the Fed policy meeting which is expected to maintain interest rates as policymakers have taken a cautious stance to assess the impact Trump's rates on inflation.
"The decision comes amid ongoing tensions between President Trump and the Federal Reserve, as the President continues to pressure the central bank to lower interest rates," he explained.
Meanwhile, from within the country, the Central Statistics Agency reported that Indonesia's economic growth in the first quarter of 2025 slowed to 4.87 percent (yoy) and contracted 0.89 percent (qtq).
Despite the quarterly contraction, BPS said it would continue to monitor economic developments in the next quarter taking into account various factors, including government spending, domestic consumption trends, as well as external conditions such as commodity prices and international trade stability.
In the midst of maintained annual growth achievements, a number of economists assess the importance of paying attention to the sustainability of domestic consumption which is the main pillar of the national economy. Household consumption, which grew 4.89 percent, is indeed the largest contributor to gross domestic product.
However, this growth is still not strong enough to offset pressure from contractions in other sectors, especially in the midst of uncertain global trends and the impact of seasonal fiscal policy.
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Furthermore, the economic outlook in the next quarter is expected to depend heavily on the government's speed in disbursing budgets, price stability of staples, and export sustainability amid the global trade war.
monetary support such as strengthening the rupiah exchange rate and Bank Indonesia's steps in maintaining market liquidity will be decisive in maintaining growth momentum. By maintaining effective public communication and maintaining the trust of business actors, the government is considered to be able to minimize the turmoil that arises due to domestic and external pressures.
Ibrahim estimates that the rupiah will fluctuate but close lower in trading on Tuesday, May 6, 2025, in the price range of Rp. 16,440 - Rp. 16,500 per US dollar.
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