JAKARTA - The rupiah exchange rate in trading Tuesday, June 3 is expected to move higher against the United States (US) dollar.
To note, citing Bloomberg, on Monday, June 2, the rupiah spot exchange rate was closed up 0.45 percent to the level of Rp. 16,253 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) of Bank Indonesia (BI) closed higher by 0.02 percent to a price level of Rp. 16,300 per US dollar.
Currency observer Ibrahim Assuaibi expressed concern over the escalation of the US-Chingkok trade war escalated after President Donald Trump accused China of violating a recent trade deal, Beijing has warned.
"The market is also shaken by the increase in Trump's steel and aluminum import rates, which makes investors unsure of US policy," he said in a statement, quoted Tuesday, June 3.
Ibrahim added that the escalating military action between Russia and Ukraine, ahead of peace negotiations, also weighed on sentiment, while reports suggest Washington is considering trade rates aimed at China and India to reduce purchases of Russian oil.
In addition, China firmly rejects Trump's accusations that the country has violated the provisions of the mid-May trade agreement signed in Geneva.
China's trading ministry said Trump's accusations were unreasonable, and that Beijing would continue to protect its interests.
Trump did not specify what Chinese violations and China's response added to signs of recent tensions in US-Chingkok relations, especially after US officials acknowledged that trade negotiations between the two had stalled.
"The comments, coupled with China's repeated criticism of US controls on its chip industry, sparked growing concerns that trade relations between the two are deteriorating, and that no lasting trade deals will be reached in the near future," he said.
Meanwhile, from within the country, Ibrahim conveyed that the trend of contraction of the Indonesian Manufacturing Purchasing Managers Index (PMI) continued in May 2025 which was recorded at level 47.4 or still below the normal threshold of 50. However, this figure increased compared to the previous month of 46.7.
Based on the S&P Global report, Indonesia's manufacturing sector continued to decline in the middle towards the second quarter triggered by a decline in output and new demand that has continued to weaken since last April.
The decline in demand for new orders in May 2025 was the worst condition in almost 4 years which caused the drop in production volume.
Export performance is also said to continue to decline, while national manufacturing companies are still trying to adjust inventory and the purchasing rate responds to weak demand conditions.
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However, if you look at the level of confidence, entrepreneurs are said to be still strengthening because of the estimated production output which is still strengthening and efforts to absorb labor.
In more detail, the S&P Global report explains export performance continued to decline in May, while conditions of immobile demand prompted companies to hold back purchases and adjust inventory.
Global demand is also continuing to decline, although at a slower pace, producers reported a decline in exports particularly to the US.
Ibrahim estimates that the rupiah will fluctuate but close higher in trading Tuesday, June 3, 2025 in the price range of Rp. 16,200 - Rp. 16,250 per US dollar.
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