Jakarta: Investor confidence is considered the primary factor in\ndriving the strengthening of the rupiah exchange rate amidst global\neconomic pressures. The government is also being urged to maintain\npolicy consistency and strengthen fiscal credibility to ensure capital\nflows return and support financial market stability.<\/p>\n
This was stated by tax practitioner and Head of Tax Researcher and\nAdvisory at Inatax Consulting, Adhitya Gema Pratama, during the\nTAXCUSSION 2026 discussion themed \u201cIndonesia\u2019s Fiscal Resilience:\nTesting Policy Response Under Global Economic Pressure,\u201d organised by\nthe Research and Literature Division of the Fiscal Administrative\nScience Study Group, Faculty of Administrative Sciences, University of\nIndonesia (KOSTAF FIA UI) in Jakarta on Saturday (11\/7\/2026).<\/p>\n
Adhitya stated that the main issue facing the Indonesian economy\ncurrently is not merely the weakening of the rupiah exchange rate, but\nthe decline in investor trust. According to him, this condition is\nreflected in the continued pressure on the rupiah, which is hovering\naround Rp18,000 per US dollar, and high financial market volatility.\nBank Indonesia\u2019s Jakarta Interbank Spot Dollar Rate (JISDOR) on 29 July\n2026 was recorded at Rp18,087 per US dollar.<\/p>\n
He explained that stock market movements serve as a leading\nindicator, whereas economic growth or Gross Domestic Product (GDP)\nserves as a lagging indicator. Therefore, weakness reflected in GDP data\ndescribes the economic condition from some time ago, while financial\nmarkets reflect the expectations of businesses and investors regarding\nfuture conditions.<\/p>\n
Adhitya also highlighted the movement of Indonesia\u2019s Credit Default\nSwap (CDS) as one of the indicators used by investors to measure a\ncountry\u2019s risk level. In his view, CDS developments show that market\nparticipants are still closely monitoring Indonesia\u2019s fiscal prospects\nand the direction of the government\u2019s economic policies.<\/p>\n
He assessed that domestic factors are currently more dominant than\nexternal factors in influencing market sentiment. Amid global\nuncertainty, investors require certainty regarding policy direction to\nhave the confidence to invest their capital in Indonesia.<\/p>\n
\u201cThe most important thing is how the government can restore investor\nconfidence. If trust returns, capital flows will return, and the rupiah\nwill become stronger,\u201d he said.<\/p>\n
Adhitya added that policy consistency is the aspect most closely\nwatched by investors. He noted that frequent policy changes or unclear\ngovernment communication can trigger uncertainty and encourage investors\nto choose to place their funds in other countries.<\/p>\n
He also assessed that the high sensitivity of the market to various\nstatements from public officials demonstrates the importance of\nmaintaining the credibility of government communication. Every policy\nsignal conveyed by the government can affect investor perception of\nIndonesia\u2019s economic prospects.<\/p>\n
On the business side, Adhitya stated that the pressure of the\nweakening rupiah is most felt by companies with a high dependency on\nimported raw materials or foreign currency obligations. This condition\nmakes business actors more cautious in making investment and business\nexpansion decisions.<\/p>\n
Furthermore, economic slowdowns also have the potential to affect tax\ncompliance. He noted that when the ability to pay of business actors\ndecreases, taxes tend to be viewed as a burden, leading companies to be\nmore selective in managing their cash flows.<\/p>\n
Therefore, Adhitya believes that efforts to maintain investor\nconfidence are not only important for the stability of the rupiah\nexchange rate but also to support economic activity, investment, and\nultimately safeguard state revenue from the taxation sector.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/practitioner-states-investor-confidence-is-key-to-strengthening-the-rupiah-1785606707", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }