Amid Market Volatility and Interest Rate Hikes, Rupiah Weakens to 16,528

According to Bank Indonesia (BI)'s Jakarta Interbank Spot Dollar Rate (JISDOR) data, the United States dollar (US$) exchange rate against the Indonesian rupiah closed at Rp16,528 on Wednesday (March 19, 2025).

This weakening of the exchange rate has been occurring since Tuesday (March 18, 2025), from Rp16,379 to Rp16,432.

This weakening trend has only occurred for two days in the last week. For the rest of the week, the rupiah was predominantly strengthening, even reaching Rp16,379 at the close of trading on March 17, 2025.

This weakening was predicted by several analysts, especially given the impact following the announcement of the benchmark interest rate by Bank Indonesia (BI) and the outcome of the Federal Reserve (The Fed) meeting.

Money market analyst Ariston Tjendra believes Bank Indonesia will not raise its benchmark interest rate to curb rupiah volatility.

"The potential for the rupiah to weaken today towards Rp16,500 per US dollar, with potential support around Rp16,380 per US dollar," said money market analyst Ariston Tjendra to *Katadata* on Wednesday morning (March 19).

(Read also: [BI Maintains 5.75% Interest Rate in March 2025 to Stabilize Rupiah](https://databoks.katadata.co.id/moneter/statistik/67da9f4b258e9/bi-jaga-suku-bunga-575-pada-maret-2025-guna-stabilkan-rupiah))

Ariston explained that there are also market concerns due to the current surge in gold prices to around US$3,031 per troy ounce. Ariston stated that this condition affects risky assets like the rupiah.

Negative sentiment from US President Donald Trump's tariff policies also fuels concerns about a trade war and a global economic slowdown. In addition, the escalation of the conflict in Gaza, triggered by Israeli attacks, is adding to market anxieties.

In line with Ariston, Lukman Leong, Analyst at Doo Financial Futures, also projected a weakening of the rupiah against the US dollar due to negative domestic sentiment.

Lukman also stated that investors are anticipating BI's statement regarding the sentiment causing volatility in the domestic equity market, as this impacts the rupiah exchange rate.

"Domestic sentiment remains weak following the sell-off in the equity market. The rupiah is expected to be at the level of Rp16,400 per US dollar to Rp16,550 per US dollar," said Lukman.

(Read *Katadata*: [Rupiah Opens Weaker, Deepest Among Asian Currencies](https://katadata.co.id/finansial/makro/67da32fc5b7b5/rupiah-dibuka-melemah-terdalam-di-antara-mata-uang-asia))