Rupiah Predicted to Potentially Weaken on Monday

Economic, currency and commodity observer Ibrahim Assuaibi predicts the rupiah exchange rate could potentially weaken at the opening of trading on Monday (17/8). The rupiah had previously strengthened at the end of the week following the delivery of the 2027 State Revenue and Expenditure Budget Draft (RAPBN) by President Prabowo Subianto.

“Although it strengthened yesterday after the President’s speech about the 2027 state budget, there is a possibility that the rupiah will most likely open weaker due to external factors,” Ibrahim said in a statement received on Sunday (16/8).

He predicted the rupiah would open in the range of Rp17,820 to Rp17,880 per US dollar. “So there is a strong possibility of a 60-point weakening of the rupiah,” he explained.

“Indeed, if we look at the rupiah yesterday at Friday’s market close, it strengthened by 50 points. One of the things that made the rupiah strengthen was President Prabowo’s speech stating that economic growth in 2027 is targeted at 6%, up from the 5.4% assumed in the 2026 state budget,” Ibrahim said.

In addition, he continued, the government is targeting inflation of 2.5% and a budget deficit at 2.4% of gross domestic product (GDP).

“The internal data is still quite good. This is what actually made the rupiah close stronger by 50 points on Friday. And on Monday, the market will most likely focus on external data,” Ibrahim said.

“Especially the increasingly heated geopolitics in the Middle East, which will cause the US dollar to strengthen and thus impact the weakening of the rupiah at Monday’s opening,” he explained.

He highlighted the 2027 state budget target that sets the rupiah at Rp17,500 per US dollar, up from the previous Rp16,500.

“Now I see that there is a strong possibility that in 2027 the rupiah could be above Rp18,000. If the rupiah remains above Rp17,500, this will likely cause the budget deficit to exceed 2.86% if the rupiah continues to weaken,” Ibrahim said.

According to him, the president is optimistic that with 6% economic growth, the budget deficit will likely decrease. However, he assessed that achieving 6% will be difficult.

“It is very difficult if geopolitical conditions continue to heat up,” he concluded.