The Rupiah Is Predicted To Weaken Amid The Fed's Policy Pressure And Lack Of US Data

Rupiah and US Dollars (Photo: Antara)

JAKARTA - The rupiah exchange rate in trading Tuesday, November 18, 2025 is predicted to weaken against the United States (US) dollar.

To note, citing Bloomberg, on Monday, November 17, the rupiah spot exchange closed down 0.17 percent to the level of Rp. 16,736 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.14 percent at a price level of Rp. 16,734 per US dollar.

Money market observer Ibrahim Assuaibi explained that investors are increasingly confident that the Federal Reserve will not relax its monetary policy in the near future.

He added that this belief arose after a number of Fed officials confirmed that inflation was still high and the labor market had not shown a significant weakening.

According to him, market sentiment was also depressed due to the cessation of publications of a number of important economic data due to the closure of the US government, so investors have not received major macro indicators over the past few weeks.

"The government's closure has postponed the release from the Labor Statistics Bureau, including a report on non-farm payroll in September, which will now be released on Thursday," he said in his statement, quoted Tuesday, November 18.

He added that market participants would also pay close attention to speeches by a number of Fed officials, such as John Williams, Philip Jefferson, Neel Kashkari, and Christopher Waller.

Meanwhile, from within the country, Bank Indonesia estimates that national economic growth in 2026 will reach 5.33 percent, slightly lower than the government's target set at 5.4 percent. The BI projection considers the direction of monetary policy to be applied to accelerate the economic rate. However, the 2026 APBN target is seen as still achievable, depending on the effectiveness and speed of realization of government spending.

BI is also optimistic that the acceleration of budget realization in the future can open up opportunities for economic growth according to the target.

In addition, BI projects that inflation in 2026 will be at 2.62 percent, still in the target of inflation of 2.5 percent plus minus 1 percent, although slightly above the basic assumption of the 2026 State Budget of 2.5 percent.

Unlike BI, the Minister of Finance targets economic growth in 2026 to reach 6 percent (year-on-year), supported by the belief that the economic fundamentals will be stronger from the fourth quarter of 2025, with a projected growth of more than 5.5 percent (yoy).

This optimism is supported by improvements to a number of the latest economic indicators, such as the September 2025 retail sales index growing 3.7 percent and is expected to increase to 4.3 percent in October 2025. Meanwhile, the manufacturing Purchasing Managers Index (PMI) in October 2025 was in the expansion zone at the level of 51.2, up from 50.4 in the previous month.

Ibrahim estimates that the rupiah will fluctuate but close lower in trading on Tuesday, November 18, 2025, in the price range of IDR 16,730 - IDR 16,770 per US dollar.