Dollar Breaks Through Rp 17,500, This is the Critical Point for the Rupiah Throughout Indonesia's History

The rupiah has once again suffered a severe collapse against the US dollar on trading today, Tuesday (11/5/2026). According to Refinitiv data, as of 10:03 WIB, the rupiah weakened by 0.59% to Rp17,505/US.Thislevelmarkstheweakestpositionfortherupiaheveronanintradaybasis, whilealsosignallingthebreachofanewpsychologicallevelatRp17, 500/US. This weakening adds to the long list of pressure-filled periods that the rupiah has endured. Throughout its history, the Garuda currency has entered difficult phases several times, from monetary crises and domestic political turmoil to global shocks that drive capital outflows to safe-haven assets. (1) August-October 1997 The rupiah’s weakening from August to October 1997 marked the initial phase of the Monetary Crisis in Indonesia. During this period, the exchange rate fell from around Rp2,500/US$ to the Rp3,000s/US.IntensespeculativepressureforcedBankIndonesiatoabandonthemanagedfloatingsystemandswitchtoafree − floatingexchangerate.Thisstepwastakenbecauseforeignexchangereserveswerenolongersufficienttocontinuesupportingtherupiahthroughmarketinterventions.TheworseningdepreciationthenpromptedthegovernmenttoseekassistancefromtheInternationalMonetaryFund(IMF).Thefirstaidagreementwassignedon31October1997, withoneofthemainconditionsbeingtheclosureof16nationalprivatebanks.(2)May − June1998Afterthe1997pressures, therupiahentereditsdarkestphaseinMaytoJune1998.Refinitivdatashowsthaton16June1998, therupiahcollapsedtocloseatitsall − timelowestlevelof15, 200/US. However, on an intraday basis, it briefly touched 16,800/US.Thisextremepressureoccurredastheeconomiccrisisexpandedintoapoliticalandsocialcrisis.TheshootingofTrisaktiUniversitystudentson12May1998triggeredmassiveriots, looting, andarsoninJakartaandseveralothercities, causinginvestorstowithdrawfundsenmasse.UncertaintypeakedwhenPresidentSoehartoresignedon21May1998, whilethemarketremaineddoubtfulaboutthestabilityofthenewgovernmentunderB.J.Habibie.(3)April2001Enteringthereformera, therupiahcameunderpressureagaininApril2001, tradingintherangeofRp10, 500toRp12, 000/US. The main trigger was rising political uncertainty, as tensions between President Abdurrahman Wahid (Gus Dur) and the DPR and MPR peaked amid plans for a special session to dismiss the president. At the same time, relations with the IMF deteriorated because loan disbursements were delayed due to slow progress on economic reforms, worsening foreign exchange market sentiment. (4) October-November 2008 One of the rupiah’s dark periods also occurred in 2008. From October to November that year, pressure on the rupiah came from abroad through the Global Financial Crisis, which began with the collapse of the US housing market and peaked with the bankruptcy of Lehman Brothers in September 2008. Panic led global investors to pull funds from emerging markets and shift them to safe assets like the US dollar and US government bonds. The rupiah, which had been stable around Rp9,000/US$ in August 2008, then fell to Rp12,100 to Rp12,600/US$ in November 2008. (5) September 2015 Major pressure on the rupiah returned in 2015. Up to 14 September 2015, the rupiah weakened by 15.87% for the year, closing at Rp14,645/US$ in that month. The depreciation was triggered by reduced foreign capital inflows due to global sentiment, particularly the normalisation of US Federal Reserve monetary policy and the devaluation of China’s yuan. With high foreign exchange needs not matched by supply in the market, there was excess demand for foreign currency, pressuring the rupiah throughout the first half of 2015. (6) September-October 2018 From September to October 2018, the rupiah weakened amid turmoil in several emerging markets. The rupiah closed at Rp15,230/US$ on 11 October 2018. From an external perspective, the weakening of currencies in Turkey, Argentina, and other countries led investors to chase safe-haven assets like the US dollar, yen, and US debt securities. (7) March 2020 One of the deeper rupiah weakening moments occurred in March 2020. The exchange rate briefly touched Rp16,550/US$ and fell 13.67% throughout March 2020, even breaching the psychological Rp16,000/US$ level, the weakest since the 1998 crisis. The main trigger was global panic due to the COVID-19 pandemic. The announcement of Indonesia’s first case in early March and plans for activity restrictions worsened sentiment towards economic prospects. Foreign investors withdrew large sums from Indonesia’s stock market and government bonds to move to safe havens like the US dollar. (8) May-June 2024 In June 2024, the rupiah broke through the Rp16,400/US$ level again, becoming the lowest point since the pandemic period in April 2020. The pressure mainly came from external factors, namely the US Federal Reserve’s interest rates remaining high for longer because US inflation had not fallen as targeted. The Fed’s interest rates were recorded at 5.25% - 5.50% and held steady from July 2023 to August 2024, or about one year. This condition strengthened the US dollar and triggered capital outflows from developing country markets, including Indonesia. (9) April 2025 The rupiah faced sharp pressure in April 2025 after US President Donald Trump announced aggressive global tariff policies on 2 April 2025. This sentiment triggered turmoil in global financial markets, followed by a strengthening of the DXY and rising yields on US Treasuries. On Tuesday, 8 April 2025, the rupiah closed down 1.84% at Rp16,850/US.TherupiahalsoclosedatRp16, 865/US as the weakest point throughout 2025 at that time. Even the rupiah briefly touched Rp16,970/US$ on 9 April 2025 at 09:40 WIB, which became the all-time intraday weakest position. Global investors once again prioritised dollar-based assets because the market assessed the room for