February 18, 2025 | 05:24 pm
TEMPO.CO, Jakarta - The Indonesian rupiah closed weaker at Rp16,278 per U.S. dollar on Tuesday, February 18, 2025. The depreciation of Indonesia's currency is predicted to continue tomorrow.
The rupiah weakened by 10 points compared to the previous closing. Forex analyst Ibrahim Assuaibi predicts that the depreciation will continue. "For tomorrow's trading, the rupiah is expected to fluctuate but close weaker in the range of Rp16,260 - Rp16,320 per U.S. dollar," said Ibrahim in his routine analysis on Tuesday, February 18, 2025.
The rupiah's depreciation is in line with the strengthening U.S. dollar index. According to Ibrahim, sentiment affecting currency movements include continued uncertainty over U.S. President Donald Trump's trade tariff plans.
The Republican party president hinted that reciprocal tariffs on new U.S. trading partners will be imposed in April. However, reports over the weekend indicate that the European Union is considering import controls on certain U.S. goods. "A move that could mark an increase in trade tensions with the U.S.," he said.
Last week, Trump imposed a 25 percent tariff on all steel and aluminum imports. According to Ibrahim, this has raised concerns about retaliatory actions from other countries. In addition, the market remains cautious about high U.S. interest rates for an extended period.
Officials from the U.S. central bank, or Federal Reserve, have indicated that they will keep interest rates stable, even if Trump's tariffs don't cause a significant spike in inflation. The comments came after data last week showed that U.S. inflation grew more than expected in January.
This week, according to Ibrahim, investor focus will be on the release of the January Federal Reserve meeting. "To measure how policymakers have been trying to consider the risks of a broader trade war following President Donald Trump's trade policies."
The latest data shows that U.S. consumer prices rose in January at the fastest pace in almost 18 months. He said this reinforces the Fed's message that they are not in a hurry to continue interest rate cuts amid growing economic concerns.
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