Rupiah Predicted Weakening Amid US Dollar Strengthening

Illustration (Photo: Doc. ANTARA)

JAKARTA - The rupiah exchange rate in trading Friday, November 7, 2025 is predicted to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Thursday, November 6, the rupiah spot exchange closed down 0.05 percent to the level of Rp. 16,717 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.02 percent at a price level of Rp. 16,729 per US dollar.

Money market observer Ibrahim Assuaibi explained that the weakening of the rupiah was influenced by the increasing speculation that the Federal Reserve (The Fed) would likely not cut interest rates in December. This comes after Fed Chairman Jerome Powell confirmed that the decision to cut interest rates could not be ascertained.

"Strong private economic data also supports the dollar, as ADP's non-farm labor data shows a figure higher than expected for October, signaling that the US labor market remains strong. The purchase manager index data also shows that US business activities remain strong," he said in his statement, quoted Thursday, November 6.

He added that market participants are now highlighting private economic data to look for clues to the US economy, especially because the 36-day government closure has caused delays in official data releases.

According to him, the strong economic data on Wednesday made market participants lower expectations of the possibility of cutting interest rates in December. Based on the CME FedWatch, the chances of cutting 25 basis points fell to 59.3 percent from the previous 70.3 percent.

From the other hand, Ibrahim said the US Department of Transportation announced plans to reduce 10 percent of flights at 40 major airports starting Friday. This policy was taken due to concerns regarding flight safety due to a shortage of air traffic controllers.

Meanwhile, the plan comes amid the continued closure of the US government which is now entering its 36th day and disrupting a number of public services.

"About 13,000 air traffic controllers and 50,000 transportation security agents have been working without pay due to the shutdown. Tens of thousands of flights have been delayed since the shutdown began, while the shortage of TSA staff has also caused congestion at major airports," he said.

Meanwhile, from within the country, the Government plans to submit a Draft Law (RUU) on Rupiah Redenomination. This proposal is stated in the Minister of Finance Regulation (PMK) No.70/2025 concerning the Strategic Plan of the Ministry of Finance 2025'2029.

The Ministry of Finance targets the discussion of this bill to be completed in 2026, with four main objectives, namely Increasing economic efficiency and national competitiveness; Maintaining the continuity of economic growth; Stabilizing the value of the rupiah and protecting JAKARTA - The rupiah exchange rate in trading Friday, November 7, 2025 is predicted to move lower against the United States (US) dollar.

To note, citing Bloomberg, on Thursday, November 6, the rupiah spot exchange closed down 0.05 percent to the level of Rp. 16,717 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.02 percent at a price level of Rp. 16,729 per US dollar.

Money market observer Ibrahim Assuaibi explained that the weakening of the rupiah was influenced by the increasing speculation that the Federal Reserve (The Fed) would likely not cut interest rates in December. This comes after Fed Chairman Jerome Powell confirmed that the decision to cut interest rates could not be ascertained.

"Strong private economic data also supports the dollar, as ADP's non-farm labor data shows a figure higher than expected for October, signaling that the US labor market remains strong. The purchase manager index data also shows that US business activities remain strong," he said in his statement, quoted Thursday, November 6.

He added that market participants are now highlighting private economic data to look for clues to the US economy, especially because the 36-day government closure has led to delays in official data releases.

According to him, the strong economic data on Wednesday made market participants lower expectations of the possibility of cutting interest rates in December. Based on the CME FedWatch, the chances of cutting 25 basis points fell to 59.3 percent from the previous 70.3 percent.

From the other hand, Ibrahim said the US Department of Transportation announced plans to reduce 10 percent of flights at 40 major airports starting Friday. This policy was taken due to concerns regarding flight safety due to a shortage of air traffic controllers.

The plan comes amid the continued closure of the US government which is now entering its 36th day and disrupting a number of public services.

"About 13,000 air traffic controllers and 50,000 transportation security agents have been working without pay due to the shutdown. Tens of thousands of flights have been delayed since the shutdown began, while the shortage of TSA staff has also caused congestion at major airports," he said.

Meanwhile, from within the country, the Government plans to submit a Draft Law (RUU) on Rupiah Redenomination. This proposal is stated in the Minister of Finance Regulation (PMK) No.70/2025 concerning the Strategic Plan of the Ministry of Finance 2025'2029.

The Ministry of Finance targets the discussion of this bill to be completed in 2026, with four main objectives, namely to Increase economic efficiency and national competitiveness; Maintain sustainability of economic growth; Stabilize rupiah value and protect people's purchasing power; and increase the credibility of the rupiah currency.

"The issue of rupiah redenomination is actually not new. In 2023, for example, the government stated that the rupiah redenomination is considered to have not been implemented in the near future, especially in the midst of the current economy which is not stable," he said.

To note, the rupiah simplification plan has actually been listed in PMK No.77 / PMK.01 / 2020 concerning the Strategic Plan of the Ministry of Finance 2020 2024, where it is explained the concept of reducing the three zeros behind the nominal, for example Rp1,000 to Rp1.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading Friday, November 7, 2025, in the price range of IDR 16,700 - IDR 16,750 per US dollar.