Doo Financial Futures currency analyst Lukman Leong predicts the rupiah exchange rate will strengthen as the United States (US) reciprocal tariff delay ends.
"Investors tend to wait and see (ahead) of the week before the end of Trump's reciprocal tariff delay," said Lukman Leong, in Jakarta, Wednesday.
US President Donald Trump announced on Tuesday (1/7) that he does not plan to extend the moratorium on reciprocal trade tariffs that is set to expire on July 9.
Trump also said his administration would soon send a letter to U.S. trading partners congratulating them on their right to do business with the U.S.
The US President stated that the implementation of the tariff policy had generated revenues of around 129 billion US dollars (around Rp. 2 quadrillion) for his country and that number would continue to increase.
Trump announced that the US had signed a trade deal with China on Wednesday (25/6). He also indicated that a trade deal with India was imminent.
On April 2, Trump signed an executive order imposing tariffs on imports from other countries. The base rate is set at 10 percent, with higher tariffs imposed on 57 countries based on the U.S. trade deficit with each particular country.
Then, on April 9, Trump said tariffs on exports from more than 75 countries that did not retaliate would be reduced to 10 percent for 90 days.
A 90-day tariff suspension for most countries is set to end on July 8. Meanwhile, a 90-day tariff suspension on China, which is also part of the scheme, is set to end on August 12.
Another sentiment towards the rupiah exchange rate comes from investors' attitudes ahead of the ratification of the US Tax Bill.
"The US dollar index continues to fall due to concerns about the Trump tax bill and tariff uncertainty," said Lukman.
Citing Xinhua, the US Senate has passed US President Donald Trump's massive tax cut bill, marking a major procedural step toward passing the measure before the July 4 recess.
The 940-page bill, titled the “One Big Beautiful Bill Act,” was approved in a 51-49 vote.
The new rules would extend the 2017 tax cuts, cut other taxes, and increase military and border security spending, while offsetting revenue losses through deep cuts to Medicaid, food stamps, renewable energy and other social welfare programs.
