The rupiah strengthened 0.16 percent to Rp16.665 per US dollar at Wednesday's market open, alongside weakening US economic data. Market participants await Bank Indonesia's Board of Governors meeting announcement, expected to hold the policy rate at 4.75 percent. Domestic inflation slowed to 2.72 percent year-on-year in November 2025.
On Wednesday (17/12/2025), the rupiah opened stronger at Rp16.665 per US dollar, up 26 points from the previous Rp16.691. This strengthening was influenced by the release of US economic data showing weakness, including Non-Farm Payrolls (NFP) shrinking by a net 41,000 jobs over October-November 2025, far below market expectations of +25,000. US unemployment rose to 4.6 percent in November from 4.4 percent in September, exceeding the consensus of 4.5 percent. Retail sales stagnated at 0.0 percent month-to-month in October, below the forecast of 0.1 percent.
"Data pasar tenaga kerja dan sektor riil menunjukkan bahwa ekonomi AS tetap lesu pada November 2025," said Head of Economics at Permata Bank Josua Pardede. The US government shutdown's impact was a key factor in this slowdown.
Domestically, inflation slowed to 2.72 percent yoy in November from 2.87 percent in October, still within BI's 2.5 percent ±1 percent target. Foreign capital inflows reached 0.75 billion USD since mid-November, boosting the rupiah by 0.11 percent mtm to Rp16.652 as of December 15. However, year-to-date, the rupiah has weakened 3.6 percent.
The Institute for Economic and Social Research FEB UI recommends BI hold the BI Rate at 4.75 percent in the December RDG. "Bank Indonesia perlu mempertahankan suku bunga kebijakan pada level 4,75 persen... sembari tetap waspada," states the LPEM report. Economists like Andry Asmoro from Bank Mandiri and Teuku Riefky from LPEM agree, citing risks of capital outflows and rupiah volatility. Although room for a cut exists, exchange rate stability takes precedence, especially with potential year-end inflation pressures.
Josua Pardede forecasts the rupiah to trade between Rp16.625-Rp16.725 today.
