Dollar Breaks Through Rp 17,100, Is Indonesia's State Budget Still Safe?

The rupiah’s exchange rate against the US dollar weakened further in morning trading on Friday (10/4/2026). According to Refinitiv data, as of 09:47 WIB, the Garuda’s currency depreciated by 0.18% to Rp 17,110/US.TherupiaheventouchedRp17, 115/US, marking a new all-time intraday low. What is the impact of this rupiah weakening on the State Revenue and Expenditure Budget (APBN)? Global Markets Economist at Maybank Indonesia, Myrdal Gunarto, assesses that the rupiah’s weakening to Rp 17,100 has not yet exerted significant pressure on the APBN deficit. According to him, the additional deficit resulting from the rupiah’s depreciation remains relatively limited. “If it’s just from the rupiah exchange rate alone, because we’ve calculated it, it’s still less than Rp 5 trillion, around Rp 4.2 trillion related to the deficit caused by the rupiah’s weakening,” Myrdal told CNBC Indonesia, quoted on Friday (10/4/2026). Furthermore, Myrdal warns that broader subsequent impacts need to be watched. The rupiah’s weakening could enlarge the import burden, particularly for energy commodities like oil. If world oil prices remain high, above US$70 per barrel, fiscal pressure could increase. “If the implications affect other areas, it could be broader, like oil prices, because we buy oil from abroad, it’s an import, and it’s sensitive to prices. If, for example, oil prices exceed US$70 per barrel, it could add to the fiscal burden as well," he said. He also highlighted seasonal factors that tend to weaken the rupiah from April to July. Demand for the US dollar increases for dividend payments and foreign debt maturities. This situation is exacerbated if oil prices remain high, potentially pressuring the trade balance from surplus to deficit. Not only that, the rupiah's weakening could also impact debt interest financing. Nevertheless, this risk is assessed as still mitigable through hedging strategies by the government and private sector. "Debt interest should be mitigated by the government or private sector implementing exchange rate hedging policies; it should be safe. From the rupiah exchange rate side, if the war ends, I think it will still be below Rp 17,000/US$ if the war ends this month and the Strait of Hormuz is opened. But if the war continues, I think the rupiah could reach around Rp 17,248/US$," he said. On the other hand, currency analyst and Director of PT Laba Forexindo Berjangka, Ibrahim Assuaibi, assesses that the current rupiah position actually indicates the APBN is in an unsafe condition. This is because the basic assumption of the exchange rate in the 2026 APBN is set at Rp 16,500/US$. With the rate already breaking through Rp 17,100, according to him, the government needs to consider a revision.”There needs to be an APBN revision to change the pegged rupiah rate. It could be Rp 17,000 or Rp 17,400 or Rp 17,500/US$. That way, the APBN’s resilience will likely be safe,” Ibrahim told CNBC Indonesia, quoted on Friday (10/4/2026). He added that the current rupiah weakening is heavily influenced by external factors, particularly geopolitical tensions in the Middle East. Plans for a ceasefire agreement between the United States, Iran, and Israel are, in his view, a key sentiment in the near term. “Today, there is an agreement to be signed in Pakistan between the US with Iran and Israel on a two-week ceasefire. Whether this succeeds or not depends on this. If it succeeds, with a two-week signing, the rupiah will likely strengthen,” he said.