Jakarta – The government has emphasized that the weakening of the rupiah exchange rate against the US dollar in recent times is not a reflection of the worsening national economic conditions. Finance Minister Sri Mulyani Indrawati stated that the rupiah exchange rate fluctuation was more influenced by global pressures than domestic factors.
“The movement of the exchange rate (rupiah) is more reflective of global dynamics, and is not always the same or identical to Indonesia’s fundamental conditions,” said Sri Mulyani.
According to data from the Ministry of Finance, the average rupiah exchange rate in the January-March 2025 period was at Rp16,443 per US dollar. Meanwhile, the exchange rate at the end of March was recorded at Rp16,829 per US dollar. The government itself in the macro assumptions of the 2025 State Budget targets the rupiah exchange rate to be in the range of Rp16,000 per US dollar.
Sri Mulyani explained that the current global dynamics play a major role in forming pressure on the currencies of developing countries, including Indonesia. Market expectations for a cut in the benchmark interest rate by the US Central Bank, The Fed, are being held back by still-high inflation and a tight labor market.
ŇThis makes the Fed more cautious in lowering interest rates, thus encouraging capital flows back to the United States and strengthening the US dollar index,Ó he said.
The global situation was also worsened by the re-election of Donald Trump as US President, who immediately took aggressive tariff policy measures against around 70 US trading partner countries. This reciprocal tariff policy, according to the Minister of Finance, has triggered major turmoil in global financial markets and increased uncertainty in the first quarter of 2025.
“This has caused the exchange rate against the US dollar in many countries to adjust, including Indonesia,” added Sri Mulani.
However, the rupiah movement showed signs of strengthening. At the opening of trading, the rupiah strengthened by 0.27% or 46 points to Rp16,715 per US dollar. Even until the closing, the rupiah strengthened significantly by 158 points to Rp16,603 per US dollar.
Meanwhile, Currency Observer, Ibrahim Assuaibi, projects that the rupiah’s movement will still fluctuate in the near future, but will tend to strengthen.
“For trading next Monday, the rupiah will fluctuate but will close stronger in the range of Rp16,540 to Rp16,610 per US dollar,” said Ibrahim.
The government remains optimistic that Indonesia’s economic fundamentals are strong and stable. Fiscal and monetary policies continue to be aligned to maintain the competitiveness and resilience of the national economy amid high global uncertainty.
