Jakarta. The rupiah weakened sharply against the US dollar on Monday afternoon, closing at Rp 16,448 per dollar, depreciating by 143.5 points. The dip follows heightened tensions in the ongoing US-China trade war, which has further fueled market volatility. Meanwhile, the US Dollar Index rose 1.36 points, reaching 109.7, indicating growing strength in the dollar amid global trade uncertainties.

The rupiah had already closed lower on Friday, slipping 48 points to Rp 16,304 per dollar. Currency analysts predict continued fluctuations in the coming days, with the rupiah expected to trade within the range of Rp 16,430 to Rp 16,500 on Tuesday.

Ibrahim Assuaibi, a currency analyst at Laba Forexindo Berjangka, said the rupiah's decline reflects the intensification of the US-China trade war, especially following the recent imposition of tariffs by US President Donald Trump. Last week, Trump imposed a 25 percent tariff on imports from Canada and Mexico, as well as a 10 percent tariff on China. Both Canada and China vowed to retaliate.

“Canada responded swiftly, imposing a 25 percent retaliatory tariff on US imports. Meanwhile, China has expressed strong disapproval, though it remains open to dialogue with the US to prevent further escalation,” Ibrahim said.

The tariffs, particularly the new 10 percent import tax on China, are seen as a significant blow to China’s export-driven economy. However, China has already been reducing its trade exposure to the US over the past few years.

In response, China’s Finance and Commerce Ministry announced plans to challenge Trump's tariffs at the World Trade Organization (WTO). The country has also warned of unspecified countermeasures, which are set to take effect on Tuesday.

“The tariff war is causing widespread uncertainty in global markets, which could adversely affect Indonesia’s exports, especially as countries involved in the conflict reduce production,” he said. “This will also lead to increased competition in the global market, as other countries may look to Indonesia for goods they previously sourced from the US or China.”

The analyst also highlighted that the trade war could significantly worsen Indonesia's trade balance. As demand for Indonesian exports weakens and other countries shift their imports, the nation's economic growth could be under pressure. With the rupiah's exchange rate set at Rp 16,000 in the current state budget (APBN), the government will need to carefully monitor and adjust fiscal policies to mitigate the impact on the local economy.