RRI.CO.ID, Jakarta – The rupiah is expected to face downward pressure against the US dollar amid speculation over President Donald Trump’s choice of former Federal Reserve Governor Kevin Warsh as the next chairman of the US central bank.

Lukman Leong, a currency analyst at Doo Financial Futures, said the speculation surrounding Trump’s pick has driven market sentiment.

“The rupiah has the potential to weaken against the US dollar due to speculation that Trump’s choice, Kevin Warsh, as the new head of the Fed, will support the US dollar,” Lukman said in Jakarta on Monday, February 2, 2026, as quoted by Antara.

Despite the outlook, the rupiah opened stronger in Monday’s trading session, gaining 10 points, or 0.06 percent, to IDR 16,776 per US dollar from IDR 16,786 previously.

Citing Anadolu, Trump has announced his selection of Warsh to replace Jerome Powell as chairman of the Federal Reserve, whose term ends in May 2026.

Although previously known as a strong inflation hawk, Warsh has recently aligned with Trump by publicly advocating lower interest rates. Trump has repeatedly stated that he will appoint a Fed chairman who supports lower borrowing costs.

With U.S. interest rates currently in the 3.5-3.75 percent range, Trump has argued that the United States should have the lowest interest rates in the world and has called for cuts to as low as 1 percent.

“Although Warsh is Trump’s choice, he is seen as having experience at the Federal Reserve and is not expected to immediately comply with Trump’s demand to cut interest rates,” Lukman said.

The rupiah’s potential weakening is also expected to be driven by hawkish remarks from Federal Reserve Vice Chair for Supervision Michelle Bowman, who said the central bank must remain cautious in cutting rates.

“However, the depreciation is expected to be limited, as investors are awaiting Indonesia’s trade and inflation data to be released this afternoon. Annual inflation is projected to rise to 3.8 percent, while exports and imports are both expected to contract by 2.4 percent and 0.7 percent, respectively, although the trade balance is still expected to record a surplus of USD 2.45 billion,” he said.

Based on these factors, the rupiah is forecast to trade between IDR 16,700 and IDR 16,800 per US dollar. ***