Brace for Impact: Rupiah Weakness Set to Drain Indonesian Wallets Once More

The rupiah’s depreciation against the US dollar continues, even breaching a new psychological level of Rp18,000 per US dollar. This condition brings new challenges for the purchasing power of the public and business sectors in Indonesia. In trading on Friday (5/6/2026), referring to Refinitiv data, the rupiah opened 0.17% weaker at Rp18,050/US.Previously, onThursday(4/6/2026), therupiahclosed0.45. This position is the weakest level in the history of the rupiah against the US dollar. This condition has the potential to trigger price increases for various goods consumed daily. From instant noodles, bread, tempeh, tofu, sugar, and milk to electronic products and electric vehicles, all face the risk of price hikes due to swelling import costs. The rupiah’s depreciation is a concern because Indonesia remains heavily reliant on foreign supplies for a number of foodstuffs and industrial raw materials. When the dollar strengthens, import costs reflected in the CIF (Cost, Insurance, and Freight) value also increase, potentially pushing up prices at both the producer and consumer levels. Data from the Central Statistics Agency (BPS) shows that cereals were Indonesia’s largest imported food commodity during January-March 2026. The group, which includes wheat, corn, and rice, reached 3.79 million tonnes with a CIF value of US$1.04 billion. Wheat itself is the main raw material for the flour industry, used to produce instant noodles, bread, biscuits, and various other processed foods. This means that if import costs rise due to an increasingly expensive dollar, the prices of these products are likely to be pushed up. Similar pressure also haunts tempeh and tofu, long known as food for the common people. Indonesia still imports oil seeds, including soybeans, totalling 866.9 thousand tonnes worth US$536.5 million during the first three months of this year. Not only that, imports of residues and waste from the food industry and animal feed reached 2.39 million tonnes worth US$948.4 million. This group is dominated by feed raw materials such as soybean meal, which is the backbone of the national poultry industry. If import costs rise, the prices of chicken and eggs are also likely to increase. Dependence on imports is also seen in sugar commodities, which reached 1.02 million tonnes worth US$499.5 million. Meanwhile, dairy products, eggs, and honey recorded an import value of US$415.7 million. Furthermore, Indonesia still imported fruits and nuts worth US$537 million, vegetables and tubers worth US$212.7 million, and meat and offal worth US$138 million during January-March 2026. Beyond food, the rupiah’s depreciation also has the potential to drive up the prices of various high-value non-food goods. Data from the Ministry of Trade shows that Indonesia’s non-oil and gas imports are still dominated by products such as gold, smartphones, semiconductor components, communication devices, laptops, heavy equipment, and electric vehicles. If the rupiah’s depreciation persists for a long time, the prices of imported electronic goods and electric vehicles in the domestic market are likely to be lifted due to high dependence on foreign products and components. Amid the threat of rising prices for various public needs, discouraging news also comes from the air transportation sector. Minister of Transportation Dudy Purwagandhi gave a strong signal that domestic flight ticket prices are likely to increase after the government almost finalises the revision of the Upper Rate Limit (TBA) for plane tickets. According to Dudy, the discussion regarding the new TBA is complete and is now just waiting for discussion at the ministerial level before being enacted. Dudy emphasised that the government wants to expedite the completion of the regulation, considering that airlines are currently facing operational cost pressures due to global conditions and the rupiah’s depreciation. While opening up room for tariff adjustments, the government claims it is still trying to maintain a balance between airline interests and the public’s ability to buy tickets. Dudy explained that the new scheme being prepared not only includes changes to the TBA but also a more flexible fuel surcharge mechanism that follows the movement of avtur prices. According to him, the rupiah exchange rate is also one of the factors considered in the new formulation.