Rupiah Strengthens Along With The Possibility Of A US-RI Trade Deal On Tariffs

Doo Financial Futures currency analyst Lukman Leong believes the rupiah's strengthening exchange rate is influenced by the potential for a trade agreement between the United States (US) and Indonesia regarding tariff policies. 

"The rupiah has strengthened against the US dollar, considering Trump's tariffs on 14 countries, including Indonesia, to be insignificant and not to change anything. Instead, it is seen as a postponement until August 1, providing time and opportunity for an agreement to be reached," he told ANTARA in Jakarta on Tuesday. 

The rupiah strengthened 34 points, or 0.21 percent, at the close of trading in Jakarta on Tuesday, to Rp16,206 per US dollar, up from Rp16,240. 

The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia weakened to Rp16,238 per US dollar today, down from Rp16,237 per US dollar. 

As is known, the previous tariff deadline was set for July 9, marking the end of a 90-day pause on the previously announced high tariffs that were originally set to take effect on April 2, 2025. 

Recently, Trump issued an executive order postponing the July 9 tariff deadline to August 1, according to a White House announcement. 

The postponement policy was announced amidst the Trump administration's efforts to target multiple countries with trade measures. 

The US remains imposing a 32 percent import tariff on Indonesia, unchanged from the "reciprocal tariff" rate announced in April, despite ongoing negotiations with Indonesia. 

Trump believes the US must act to address the trade deficit they have experienced after years of trade cooperation with Indonesia. 

If Indonesia is perceived to retaliate by raising tariffs, Trump has threatened to retaliate by increasing import tariffs by that amount "plus the 32 percent tariff we have imposed." 

However, Trump promised that Indonesia would not be subject to tariffs if it "decided to build or manufacture its products in the United States," while guaranteeing that its application would be processed and approved within weeks. 

He also stated that the tariff rate could still change if Indonesia agreed to adjust its trade policies and create a more open national market ecosystem to the US. 

Today, Coordinating Minister for Economic Affairs Airlangga Hartarto is scheduled to depart for the US to continue reciprocal tariff negotiations with the US. Airlangga will attend a meeting with US government representatives to discuss the decision to retain the 32 percent tariff rate as of August 1. 

"Sentiment is also positive, with the currency generally strengthening against the US dollar and equity markets generally rising," said Lukman. 

Tag: Bank Indonesia Lukman Leong Rupiah