Breaking News! IHSG Slumps 1.43%

Jakarta, CNBC Indonesia — The Jakarta Composite Index (IHSG) reversed and slid in Thursday morning trading (21 May 2026), after initially opening higher. As of 09:26 WIB, the IHSG was down 1.43% or 90.40 points at 6,228.10. The decline followed a daily high of 6,378.81. A total of 418 stocks declined, 193 advanced, and 348 were unchanged. The value of transactions reached Rp3.83 trillion with a trading volume of 6.04 billion shares in 392,200 trades. Domestic market pressure came as investors responded to Bank Indonesia’s decision to raise the policy rate by 50 basis points to 5.25% in the Board of Governors Meeting (RDG) for 19-20 May 2026. In line with that decision, BI also raised the Deposit Facility to 4.25% and the Lending Facility to 6.00%. BI Governor Perry Warjiyo explained that the rate hike was designed to safeguard rupiah stability amid growing global pressures from the Middle East conflict and to keep inflation within the central bank’s target. “Based on a comprehensive assessment of the global economy and the risks we highlighted, the Board of Governors Meeting on 19-20 May 2026 decided to raise the BI Rate by 50 basis points to 5.25%” Perry said on Wednesday (20 May 2026). Market participants also watched President Prabowo Subianto’s address regarding the draft of the 2027 State Budget (APBN) which targets keeping the fiscal deficit at a low level around 1.8%-2.4% of GDP. Separately, investors await further direction on global monetary policy, particularly the minutes of the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve. The 2027 fiscal posture envisions a more efficient and productive state expenditure, with government spending targeted at about 13.62%-14.8% of GDP, and revenues around 11.82%-12.40% of GDP. “We will continue to strive to narrow and reduce the deficit,” Prabowo said in a speech at the DPR building, Jakarta, on Wednesday (20 May 2026). In addition to the deficit, Prabowo outlined macro assumptions in the Macro-Economic Framework and the Fiscal Policy Package or KEM PPKF 2027. This document will underpin the 2027 RAPBN. For the exchange rate, the government targets the rupiah at Rp16,800-Rp17,500 per US$ in 2027. This assumption draws attention as the rupiah is still under heavy pressure against the US dollar. On growth, the government targets Indonesia’s economy to grow by 5.8%-6.5% in 2027, with inflation projected at 1.5%-3.5%.