TEMPO.CO, Jakarta - The exchange rate of the rupiah has been consistently under pressure since the closing of trade last Friday, February 28, 2025, reaching Rp 16,520 per US dollar. Currency observer Ibrahim Assuaibi warned that if this trend continues, the rupiah has the potential to touch the level of Rp 17,000 per US dollar in the near future, at least in March.
According to Ibrahim, the depreciation of the rupiah is partly due to several internal issues. He highlighted the alleged fuel adulteration case by Pertamina, which is currently under investigation by the Attorney General's Office and is estimated to cause state losses of up to Rp 193.7 trillion in just one year.
The corruption case in the crude oil management from 2018 to 2023 is said to have caused state losses of up to hundreds of trillions of rupiah. This scandal, Ibrahim said, is deemed to have a negative impact on investor confidence.
In addition, the national industrial sector is also facing major challenges. Many textile and infrastructure companies are collapsing, while the automotive sector is experiencing a slowdown with a significant number of employee layoffs. This situation erodes the purchasing power of the people and weakens domestic consumption.
"Many middle-class families now rely solely on savings for living expenses, as job opportunities are becoming increasingly scarce," said Ibrahim when contacted on Saturday, March 1, 2025.
Aside from internal factors, Ibrahim stated that the current depreciation of the rupiah is influenced by both external and internal factors. From the external perspective, the policy of US President Donald Trump to impose an additional 10 percent import tariff on China, Europe, Canada, and Mexico on March 4, 2025, is causing the dollar index to continue strengthening.
Furthermore, the ongoing high inflation in the United States and the likelihood of the US Federal Reserve maintaining high interest rates in the long term also add pressure to the currencies of developing countries, including the rupiah.
"If Trump is reelected and trade wars continue to escalate, there is a high possibility that the US interest rates will remain high for the next four years," Ibrahim said.
From a geopolitical standpoint, the escalating tensions in the Middle East are also a factor in the depreciation of the rupiah. Ibrahim highlighted the conflict between Israel and Palestine, where there is a plan for Israel to occupy Gaza for 7-8 years before returning it to Palestine. This tension has the potential to disrupt global economic stability, including in Indonesia.
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