DIGIVESTASI - As the year draws to a close, the rupiah has been on a weakening trend and briefly broke through the level of Rp16,300/US$. Bank Indonesia (BI) acknowledges that this situation is quite challenging for the Garuda currency.

"In recent months, nearly all currencies, particularly those from developing countries, have faced significant challenges," said Edi Susianto, Head of the Monetary and Securities Asset Management Department at BI, in an interview with CNBC Indonesia, quoted on Sunday (29/12/2024).

These challenges are largely driven by global factors, including increasing economic uncertainty due to the divergence in the economy of the United States (US). The US economy has strengthened, as reflected in labor and inflation data.

"Market expectations regarding statements from the Fed were for a hawkish cut, initially predicting four interest rate cuts in 2025, but now only two cuts are expected," Edi explained.

Additionally, the election of Donald Trump as US President, although not officially in office yet, has also influenced the situation. Trump has announced his plan to raise import tariffs from several countries, which will affect the US fiscal condition.

The third factor influencing this is the geopolitical dynamics, with situations in Syria, France, and South Korea impacting global currency movements, Edi added.

However, domestic factors are also at play, including the outflow of foreign capital from Indonesia's stock market, both through dividend repatriations and foreign currency debt repayments.

At the close of trading on Friday (27/12/2024), the rupiah weakened again after the two-day Christmas holiday. According to Refinitiv data, the rupiah was recorded as weakening by 0.28% to Rp16,230/US$ at the close of trading.

During the day, the rupiah fluctuated between Rp16,180/US$ and Rp16,255/US$. Over the past week, the rupiah has weakened by 0.25%.

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