Rupiah strengthens, spurred by Trump's commitment to continue tariff policies

Jakarta (ANTARA) - The Rupiah exchange rate opened stronger in Jakarta on Thursday, gaining 56 points or 0.33 per cent to Rp16,744 per US dollar, from Rp16,800 per US dollar previously.

Permata Bank’s chief economist, Josua Pardede, believes the Rupiah’s strengthening is driven by US President Donald Trump’s commitment to maintaining tariff policies.

“This strengthening is closely related to Trump’s reaffirmation of his commitment to maintaining tariff policies, which increases uncertainty regarding the direction of US trade policy in the future and reduces demand for the US dollar,” he told ANTARA in Jakarta on Thursday.

Trump is said to have given no indication of easing US tariff policies. He reaffirmed his belief that foreign partners will comply with existing trade agreements and indicated that tariffs may eventually serve as a substitute for income tax.

Before the US Congress, Trump stated that almost all countries and companies want to maintain the tariff agreements they made before the US Supreme Court’s decision on tariffs was issued.

“This statement encourages investors to shift assets denominated in US dollars,” he said.

Based on these factors, the Rupiah is projected to range between Rp16,700 and Rp16,800 per US dollar.