JAKARTA – The exchange rate of the rupiah against the US dollar is projected to continue strengthening, potentially reaching the IDR 16,100–16,000/USD range.

Head of Research at Kiwoom Sekuritas Indonesia, Liza Camelia Suryanata, said the rupiah has already appreciated to around IDR 16,200/USD, from IDR 16,600 at the end of April.

The strengthening, Liza explained, has been supported by “easing pressure on US Treasury yields and strong inflows into domestic equity and bond markets.”

She also sees further potential for the rupiah to strengthen, particularly if the US central bank, the Federal Reserve (the Fed), signals a pivot in the upcoming Federal Open Market Committee (FOMC) meetings in June or July.

In a monthly market outlook presented on Wednesday (28/5), Liza acknowledged that the likelihood of a Fed rate cut remains below 50%.

However, dovish commentary from Fed officials and weakening US economic data could contribute to dollar depreciation.

Should the Fed ease its monetary policy, similar to the recent move by Bank Indonesia (BI), it would be a positive signal for financial markets in several countries, including Indonesia.

“This will support the stability of Indonesia’s financial markets and encourage global investors to return to risk assets in emerging markets,” said Liza.

As previously reported by IDNFinancials.com, the rupiah has appreciated by 1.84% against the US dollar since the beginning of May 2025. This marks the strongest gain among currency pairs in the Asian region. (KR/ZH)