Jakarta, CNBC Indonesia – The majority of Asian currency collapsed before the United States dollar (US) this week. The weakening came after the central bank as the Federal Reserve (The Fed).
The rupiah exchange rate closed down to the US dollar at the closing of the last trading this week, Friday (9/19/2025).
Reported from Refinitiv, The Garuda currency must recognize the power of the US dollar with a depreciation of 0.52% to Rp16,585/US $. This continued the weakening of the rupiah that had occurred since trading yesterday, Thursday (9/18/2025) where the rupiah weakened 0.46% to the level of Rp16,500/US $.
The current rupiah level also makes the weakest position since May 14, 2025 or in the last four months.
Within a week, the Garuda currency collapsed 1.28%. This weakening cuts off a positive trend in the previous two weeks which always strengthened.
Permata Bank Economist, Josua Pardede, emphasized that the weakening of the rupiah this time was more triggered by market interpretations of the Fed’s attitude rather than the amount of interest rate trimming itself.
“The rupiah tends to weaken against the US dollar after the Federal Open Market Committee (FOMC) meeting not because of the trimming of the US interest rate itself, but because the overall message of the meeting is considered careful so that the demand for the dollar increases again,” explained Josua.
Meanwhile, domestic factors are considered to be the cause of the weakening of the rupiah.
Rully Wisnubroto, Senior Economist Mirae Asset Sekuritas, assessed that the flow of foreign capital outflows still occur since the cabinet reshuffle, especially the replacement of the Minister of Finance.
“The rupiah is indeed depressed because the foreigners until yesterday are still continuing, since the existence of political instability and reshuffle, especially the replacement of the Minister of Finance. There are concerns about BI’s independence, because it is quite aggressive to loosening monetary policy,” he said.
Asian currency falls out
Mayoriity of Asian currency collapsed this week. The rupiah is the worst with a weakening of 1.28%.
Weakening also occurred in Thailand, Yuan China, Japanese yen to Korean Won.
Conversely, the peso currency strengthened sharply 0.3% and Rupees finally rose with 0.21% uphill this week.
Rupee strengthened a week but had time Down to the lowest level of intraday at INR 88.32 per US dollar, approaching the lowest record of INR 88,4550/US $ 1 which was achieved last week. This currency was last traded at 88.30.
The weakness of the Asian currency continued on Friday, triggered by the increase in the US dollar after the Fed’s decision.
As is known, The Fed cut interest rates of 25 bps to 4.00 – 4.25%. However, The Fed actually showed a more attitude hawkish For next year.
This 25 BPS interest rate is the first this year. The Fed still provides a signal of the potential pruning of interest rates back at the upcoming meeting until the meeting in December 2025.
Inversely proportional to 2025, in the economic projection and the Fed interest rate at the September 2025 meeting.
The US central bank shows more attitude hawkish for 2026 compared to previous projections. This can be seen from the latest dot plot which places a higher Federal Funds Rate for next year, although it has just cut interest rates of 25 basis points.
In a press conference, the chairman of The Fed Jerome Powell called the decline in interest rates this month as a risk management based on risk management. His comments suggest that this step is more preventive cutting in a precaution if the economy slows dramatically and makes the market disappointed.
The dollar index, which had touched the lowest level of 96.22 on the Decision Day of The Fed (Wednesday), has recovered and closed in 97.64 this week or the strongest since September 10.
CNBC INDONESIA RESEARCH
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(Mae/Mae)
