{
    "success": true,
    "data": {
        "id": 1813397,
        "msgid": "restoring-market-confidence-amid-rupiah-and-ihsg-pressure-1781923854",
        "date": "2026-06-20 09:04:16",
        "title": "Restoring Market Confidence Amid Rupiah and IHSG Pressure",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Economy",
        "summary": "The Indonesian rupiah and stock market are under severe pressure, with the IHSG nearing pandemic-era lows and foreign capital outflows exceeding Rp 72 trillion. This decline is attributed more to waning investor confidence in domestic policy consistency and medium-term growth prospects than to external factors. Restoring credibility requires a clear economic roadmap, coordinated authority action, structural reform, and strengthening the domestic investor base.",
        "content": "<p>The national currency, the Garuda, has continued to experience\npressure in recent weeks, reaching a level of 18,000 per US dollar.\nMoreover, the Indonesian stock exchange nearly touched its lowest point\nsince the COVID-19 pandemic crash, hitting around the 5,500 level. It is\ntrue that the market is not always right, but it often provides earlier\nsignals about domestic conditions than other macro indicators. This\nsituation can be interpreted as a symptom of developments in the\ndomestic economy. In other words, financial markets often serve as an\nearly indicator of how changes in economic sentiment affect domestic\nconditions. If we trace the causes, the greatest challenge is not merely\nthe market weakening, but the declining investor confidence regarding\npolicy direction and national economic prospects, especially among\nforeign investors, which triggered capital outflows of more than Rp 72\ntrillion since the MSCI crash at the end of January 2026. The problem of\nthe rupiah\u2019s weakening and the plunge in the Indonesian stock exchange\nis not solely triggered by external factors such as global economic\nuncertainty, the Iran-America war, MSCI FTSE outflows, or other external\nfactors. Looking at fellow ASEAN members, the stock exchanges of\nMalaysia, Thailand, Vietnam, and other countries actually strengthened,\nwhile Indonesia alone experienced a fairly severe crash. Therefore, it\nmust be noted that the market is also assessing domestic conditions. One\nsource of investor concern is the increasing uncertainty regarding the\ndirection of national economic policy. Both domestic and foreign\ninvestors require certainty about fiscal discipline, the sustainability\nof national strategic projects, the centralisation policy for key\ncommodity exports, the direction of industrialisation, bureaucratic\nreform, and the independence of economic institutions. When policy\nsignals are perceived as changeable or inconsistent, investors tend to\nreduce risk exposure from their investment portfolios and move capital\nto safer assets offering much better returns, such as the US dollar or\nstock exchanges in other countries that are far more prudent and robust.\nAdditionally, the market is scrutinising medium-term economic growth\nprospects. In recent years, Indonesia\u2019s economic growth has tended to be\nstuck at around 5 percent. Meanwhile, the target of becoming a\nhigh-income country requires a higher and more sustainable growth\nacceleration. When the market has yet to see new growth engines capable\nof driving productive investment and increasing labour productivity, it\nlimits investor optimism. The massive capital outflow phenomenon also\nshows that Indonesia\u2019s dependence on foreign portfolio investment flows\nremains quite large and cannot be underestimated. When sentiment\ndeteriorates, foreign investors can exit in a short time, creating\ndouble pressure on the exchange rate and the stock market. This serves\nas an important reminder for all of us, including government\npolicymakers, that economic resilience cannot rely solely on macro\nstability but also requires a strong domestic investor base sourced from\ntrust that domestic conditions are worthy and safe for investment. The\nfirst step the government needs to take immediately is to rebuild\neconomic policy credibility and investor confidence. The government must\ndeliver a clear, consistent, and measurable economic roadmap.\nTransparent and consistent policy communication is crucial to reduce\nuncertainty and prevent negative speculation in the market. The second\nstep is to strengthen coordination between the government, Bank\nIndonesia, the Financial Services Authority, and market participants.\nThis has been done by the government in recent days and deserves\nappreciation. In a situation of pressure like the current one, the\nmarket needs a signal that all economic authorities share the same view\nand are working in an integrated manner to maintain national economic\nstability. The third step is to accelerate structural and bureaucratic\nreform that is simple, along with incentives for market players that can\nboost productivity and competitiveness. Reforms in investment,\neducation, employment, industrial downstreaming, and strengthening MSMEs\nmust be prioritised. Investors look not only at today\u2019s conditions but\nalso at profit prospects over the next five to ten years. The fourth\nstep is to strengthen the domestic investor base. The high growth in the\nnumber of investors, which reached 23.46 million as of March 2026,\nsurged significantly from 3.8 million in 2020. It is important to\nmaintain the confidence of these investors so they are willing to invest\ntheir capital in Indonesia through financial market instruments. The\ndevelopment of pension funds, insurance, endowment funds, and long-term\ninvestment instruments needs to be accelerated so that Indonesia\u2019s\nfinancial market is not overly vulnerable to short-term foreign capital\nflows. Ultimately, market confidence cannot be built merely through\nexchange rate intervention or momentary stimulus. Confidence is the\nresult of policy consistency, regulatory certainty and simplification,\nand the belief that the Indonesian economy has a clear development\ndirection. When that confidence returns, the strengthening of the rupiah\nand the recovery of the stock market will follow naturally.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/restoring-market-confidence-amid-rupiah-and-ihsg-pressure-1781923854",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}