Coordinating Minister Airlangga: Rupiah Weakens Due to Global Turmoil

Coordinating Minister (Menko) for Economic Affairs Airlangga Hartarto assessed that the rupiah’s exchange rate weakening today is influenced by global turmoil.

“Yes, it’s due to the turmoil, global turmoil as well (as the main influence). So, yes, we’re just monitoring it,” said Menko Airlangga when met at the Ministry of Investment and Downstreaming/Head of the Indonesian Capital Investment Coordinating Board (BKPM), Jakarta, on Thursday.

Meanwhile, the rupiah exchange rate weakened by 108 points or 0.63 percent to Rp17,289 per US dollar from the previous close at Rp17,181 per US dollar on Thursday morning.

Furthermore, Airlangga stated that the government continues to conduct further reviews to find anticipatory measures, considering that the rupiah exchange rate assumption in the 2026 State Revenue and Expenditure Budget (RAPBN) is Rp16,500 per US dollar.

On the other hand, Muhammad Amru Syifa from the Research and Development of the Indonesia Commodity & Derivatives Exchange (ICDX) stated that the rupiah’s weakening is triggered by tensions between the United States and Iran, which are driving up energy prices.

“The conflict in the Middle East, particularly the tension between the US and Iran, is pushing up energy prices and increasing demand for the US dollar as a safe-haven asset,” he told ANTARA.

From the domestic side, he continued, Bank Indonesia’s decision to maintain interest rates at 4.75 percent reflects a focus on exchange rate stability amid external pressures.

BI also conveyed that this policy aims to reduce pressure in the foreign exchange spot market while strengthening the stabilisation of the rupiah exchange rate.

“Going forward, the direction of the rupiah will very much depend on geopolitical developments, the direction of Federal Reserve policies, and the effectiveness of domestic policy mixes in maintaining financial market stability,” he said.