Rupiah is Predicted to Weaken amid Global Geopolitical Tensions

Illustration. (Photo: Dok. Antara)

JAKARTA - The rupiah exchange rate on Wednesday, December 24, 2025 is predicted to weaken against the US dollar.

To note, citing Bloomberg, on Tuesday, December 23, the spot rupiah exchange rate closed down 0.06 percent to Rp16,787 per US dollar.

Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of the Bank Indonesia (BI) closed down 0.10 percent at a price level of Rp16,790 per US dollar.

Money market observer Ibrahim Assuaibi, assessed that the weakening of the rupiah was triggered by the increasing global geopolitical tensions, one of which came from the US and Venezuela relations, following reports that the US navy tried to seize a third oil tanker associated with the country.

In addition, he said tensions in the Middle East region had again increased as the Iran-Israel conflict heated up, with the latest reports indicating that Iran could potentially use large-scale military exercises as a cover for possible offensive operations.

In the future, Ibrahim also conveyed that market participants are still taking into account the opportunity for further monetary policy easing by the Federal Reserve until 2026.

"Because the latest data show cooling inflationary pressures and a weaker US labor market," he said in his statement, quoted Wednesday, December 24.

On the other hand, the attention of the global market today is focused on a number of US economic indicators, such as the four-week average of the ADP Employment Change, the delayed third quarter Gross Domestic Product (GDP) report, Durable Goods Orders data, Industrial Production, and Consumer Confidence Index.

Meanwhile, from within the country, Bank Indonesia revealed that the value of bank credit that has not been disbursed (undisbursed loan) reached around Rp. 2,500 trillion as of November 2025, this condition occurred because the demand for credit has not shown significant strengthening.

Meanwhile, corporations are still waiting and seeing amid economic uncertainty, while households tend to refrain from taking consumption loans due to concerns about future economic prospects.

From the supply side, BI assesses that banks have actually obtained various incentives. However, strengthening credit demand is still a major challenge that needs to be encouraged.

Meanwhile, the Financial Services Authority (OJK) considers the high undisbursed loan to reflect the existence of credit withdrawal space in the future and with a large financing commitment, there is an opportunity to increase credit realization when economic conditions improve and business confidence increases.

Regarding this situation, the national banking sector is still considered to have the capacity to support productive financing, as long as it is accompanied by careful risk management and appropriate economic policies.

In addition, the recovery of a number of economic sectors, coupled with fiscal and monetary policy support, is believed to be able to encourage a multiplier effect on household consumption and business investment.

Ibrahim estimates that the rupiah will move fluctuatio but will close weaker on Wednesday, December 24, 2025 in the price range of Rp16,780-Rp16,810 per US dollar.