The Rupiah is Predicted to Weaken, the Market is Waiting for the Fed's Policy Statement

US Dollar and Rupiah (Photo: dok. Antara)

JAKARTA - The rupiah exchange rate on Wednesday, December 31, 2025 is predicted to weaken against the US dollar.

To note, quoting Bloomberg, on Tuesday, December 30, the spot rupiah exchange rate closed up 0.10 percent to Rp16,771 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of the Bank Indonesia (BI) closed up 0.04 percent at a price level of Rp16,782 per US dollar.

Money market observer Ibrahim Assuaibi, said that the attention of market participants is currently focused on the release of the Federal Reserve's latest policy meeting minutes.

He added that investors would pay attention to the contents of the minutes to obtain signals related to the US central bank's views on inflation developments, labor market conditions, and the direction of future interest rate policy.

According to him, this is important considering that the market is starting to take into account the possibility of easing monetary policy in 2026.

He added that the Fed's minutes could potentially affect market movements in the short term, especially amid the lack of economic data releases and transaction volumes are expected to remain low due to year-end holidays.

"The US market will be closed this weekend for the New Year's holiday, which further limits participation," he said in his statement, quoted Wednesday, December 31.

Meanwhile, from within the country, throughout 2025, the Indonesian economy faces quite a heavy challenge due to increasing global uncertainty, escalation of geopolitical tensions, and the impact of the United States tariff policy.

Ibrahim said that the condition had put pressure on market confidence and raised concerns about the prospects for national economic growth.

He added that the slowdown occurred as people adjusted their consumption, moderated export performance, and high global uncertainty.

"Market sentiment has worsened in the first half of 2025, especially after US President Donald Trump announced a reciprocal tariff policy in April 2025," he explained.

He added that a number of international institutions even estimate the risk of a deeper economic slowdown due to potential disruptions in global trade chains.

However, Ibrahim said that Indonesia's economic performance has proven to be stronger than expected and this resilience is supported by solid household consumption and relatively high investment growth.

He said economic growth above 5 percent was proof that the national economy remained resilient amid global geopolitical pressures and trade war dynamics.

According to him, this stability is also strengthened by the synergy of fiscal and monetary policies which are able to maintain macroeconomic conditions, while confirming the continued economic recovery amid global uncertainty.

Ibrahim predicted that the rupiah would move fluctuatio but closed weaker on Wednesday, December 31, 2025 in the price range of Rp16,770 - Rp16,800 per US dollar.