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Rupiah Poised for Gains Against US Dollar in June 2025
Anticipated rupiah Strength
The Indonesian rupiah is projected to appreciate against the U.S. dollar as June 2025 approaches. This forecast hinges on expectations of a more dovish stance from the U.S. Federal Reserve.
Current Market Dynamics
Currently, the rupiah has strengthened to approximately Rp 16,200 per U.S. dollar. This gratitude aligns with downward pressure on U.S. Treasury yields and a surge of foreign capital inflows into indonesian stock and bond markets.
Pro Tip: Understanding Capital Inflows
Capital inflows occur when foreign investors purchase domestic assets, such as stocks and bonds.This increased demand for the local currency typically leads to its appreciation.
Kiwoom Sekuritas Indonesia’s Outlook
Kiwoom Sekuritas Indonesia anticipates further strengthening of the rupiah, perhaps reaching a range of Rp 16,100 to Rp 16,000 against the dollar. This projection was outlined in a research note released on Friday, May 30, 2025.
According to Kiwoom Research, the rupiah exchange rate against the US dollar still has the prospect to strengthen to the range of Rp 16,100-16,000.
The Federal Reserve’s Role
the realization of this projection could accelerate if the Federal Reserve signals a policy pivot during its Federal Open market Committee (FOMC) meetings in June or July. Even if the probability of interest rate cuts remains below 50 percent,a dovish tone from Fed officials or weaker U.S. economic data could trigger a dollar decline.
Did You know?
A “dovish” monetary policy stance typically implies a central bank is inclined to maintain lower interest rates to stimulate economic growth, even if it risks higher inflation.
Impact on Indonesian Markets
A weaker dollar would bolster the stability of Indonesia’s financial markets and encourage global investors to reinvest in risk assets within emerging markets.
This will support the stability of Indonesia’s financial markets and encourage global investors to return to risk assets on emerging markets
Recent Market Performance
Bloomberg data indicates that the rupiah closed lower in the spot market on Wednesday, May 28, 2025, settling at Rp 16,296 per dollar, a 0.06 percent decrease from the previous close of Rp 16,287. Similarly, the Jakarta Interbank Spot Dollar Rate (Jisdor) middle rate on the same day was Rp 16,300 per dollar, weaker than the Rp 16,225 recorded on Tuesday, May 27, 2025.
