Analyst Predicts Rupiah Strengthening Amid U.S.-China Dialogue Plans

April 23, 2025 | 08:23 pm

TEMPO.CO, Jakarta - Lukman Leong, a currency analyst at Doo Financial Futures, anticipates that the rupiah exchange rate will strengthen following the planned dialogue between the United States and China regarding tariff policies. "U.S. Treasury Secretary Bessent said that an agreement with China is expected in the near future," he said in Jakarta on Wednesday, April 23, 2025, as reported by Antara.

The U.S. has imposed substantial tariffs on Chinese goods, reaching up to 245 percent. This includes a reciprocal tariff of 125 percent, a 20 percent tariff related to the fentanyl issue, and "Section 301" tariffs on specific goods, ranging from 7.5 to 100 percent.

Conversely, China announced on April 11, 2025, the implementation of a 125 percent import tariff on US goods. "Last night, Trump said that China's tariffs would not approach 145 percent, but neither would they be zero," Lukman noted.

Furthermore, the rupiah is expected to gain value against the US dollar due to positive risk sentiment stemming from Trump's statement indicating no intention to dismiss Federal Reserve (The Fed) Governor Jerome Powell. "Regarding Powell, he simply stated that there is no intention to remove Powell from his position," Lukman elaborated.

Previously, in a post on Trump's social media platform, Truth Social, on April 17, 2025, the U.S. President had asserted, among other things, that "Powell’s termination cannot come fast enough!" The implication of this post was that Trump keenly anticipated the moment when Powell would be relieved of his duties as the head of the U.S. central bank.

Indeed, on the same day, various international news outlets also reported that Trump had informed reporters, "I’m not happy with him. I let him know it."

One of the primary reasons for Trump's dissatisfaction with Powell was the Fed Governor's cautious assessment of the economic outlook following Trump's significant tariff adjustments initiated on April 3, 2025.

Additionally, Trump had repeatedly urged the Fed to lower interest rates immediately. However, Powell maintained that his team required "greater clarity" regarding the impact of Trump's tariff policy before taking any action.

Based on these factors, the rupiah exchange rate is estimated to fluctuate between Rp16,750 and Rp16,900 per US dollar. At the opening of trading on Wednesday morning in Jakarta, the rupiah exchange rate slightly weakened by 1 point or 0.01 percent to Rp16,861 per US dollar, down from the previous Rp16,860 per US dollar.

Editor's Choice: Rupiah Falls to Rp 16,871.5 This Afternoon as BI Hold Interest Rates Amid Trade Tensions

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