Rupiah Closes Weak at 18,049 per US Dollar
The exchange rate of the Rupiah against the US Dollar closed weaker on Thursday (4/6) afternoon, dropping 0.46% to the level of Rp18,049. The Rupiah corrected by 83 points from its previous position of Rp17,966 per US Dollar, driven by global geopolitical sentiment and domestic fiscal concerns.
Money market analyst Ibrahim Assuaibi explained that this weakness was triggered by a combination of external factors, primarily increasing tensions in the Middle East. Although Washington announced a ceasefire agreement between Israel and Lebanon, the situation remains heated following reports of Iranian missile attacks on Kuwait and Bahrain, as well as US attacks on Qeshm Island in Iran.
“Investors tend to be cautious amidst this uncertainty. On the other hand, the market is also awaiting the release of the United States non-farm payrolls data scheduled for Friday,” Ibrahim said in Jakarta on Thursday.
On the domestic front, the surge in crude oil prices is a major concern as it has the potential to pressure the external balance and push Indonesia’s fiscal deficit closer to the 3% limit. April trade data showed a shrinking surplus due to rising oil imports, while May inflation was recorded at 3.08%, exceeding the midpoint of Bank Indonesia’s target.
Additional negative sentiment came from the investment sector. Moody’s Ratings assigned a Baa2 rating to the global medium-term note programme of PT Danantara Investment Management, but with a negative outlook. This assessment reflects the strong link between the company and the Indonesian Government as its sole shareholder.
“In the long term, the rating is likely to move in line with Indonesia’s sovereign debt rating. Danantara’s rating could decline if Indonesia’s sovereign rating weakens,” Ibrahim added.
For the next trading session, the exchange rate is predicted to remain volatile. Ibrahim projects that the Rupiah could potentially close weaker within the range of Rp18,050 to Rp18,120 per US Dollar.
Furthermore, the Chief Economist of Permata Bank, Josua Pardede, warned of a potential surge in the 2026 State Budget (APBN) deficit by up to Rp200 trillion due to the weakening Rupiah and rising oil prices.