Dollar Breaks Through Rp17,300! These Are the Critical Points for the Rupiah from Rp3,000 to Rp17,000

Jakarta, CNBC Indonesia - The rupiah is once again under pressure and has recorded a new record weakening against the US dollar on Thursday’s trading (23/4/2026). According to Refinitiv data, as of 09:32 WIB, the rupiah weakened by 0.79% to Rp17,305/US.Thislevelmarkstheweakestpositionfortherupiaheveronanintradaybasis, whilealsosignallingthebreachofanewpsychologicallevelatRp17, 300/US. Pressure on the Garuda currency has actually been evident since the start of trading. The rupiah opened 0.23% weaker at Rp17,210/US, thencontinuedtofalldeeperjustminutesafterthemarketopened.Atthesametime, theUSdollarindex(DXY), whichmeasuresthestrengthofthegreenbackagainstsixmajorworldcurrencies, wasrecordedat98.627, orupslightlyby0.04 to the Rp3,000s/US.IntensespeculativepressureforcedBankIndonesiatoabandonthemanagedfloatingsystemandswitchtoafree − floatingexchangerate.Thisstepwastakenbecauseforeignexchangereserveswerenolongersufficienttocontinuesupportingtherupiahthroughmarketinterventions.TheworseningdepreciationthenpromptedthegovernmenttoseekassistancefromtheInternationalMonetaryFund(IMF).Thefirstaidagreementwassignedon31October1997, withoneofthemainconditionsbeingtheclosureof16nationalprivatebanks.(2)May − June1998Afterthe1997pressures, therupiahentereditsdarkestphaseinMaytoJune1998.Refinitivdatashowsthaton16June1998, therupiahcollapsedtocloseatitsall − timelowestlevelofRp15, 200/US. However, on an intraday basis, the rupiah once reached Rp16,800/US.Thisextremepressureoccurredastheeconomiccrisisexpandedintoapoliticalandsocialcrisis.TheshootingofTrisaktiUniversitystudentson12May1998triggeredmassiveriots, looting, andarsoninJakartaandseveralothercities, causinginvestorstowithdrawfundsenmasse.UncertaintypeakedwhenPresidentSoehartoresignedon21May1998, whilethemarketremaineddoubtfulaboutthestabilityofthenewgovernmentunderB.J.Habibie.(3)April2001Enteringthereformera, therupiahcameunderpressureagaininApril2001, movingintherangeofRp10, 500toRp12, 000/US. The main trigger was rising political uncertainty, as tensions between President Abdurrahman Wahid or Gus Dur and the DPR and MPR peaked alongside plans for a special session to dismiss the president. At the same time, relations between the government and the IMF deteriorated due to delayed loan disbursements, as economic reforms were deemed to be progressing slowly, thus worsening foreign exchange market sentiment. (4) October-November 2008 One of the dark periods for the rupiah also occurred in 2008. From October to November that year, pressure on the rupiah came from abroad through the Global Financial Crisis that 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 withdraw 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 Rp9,000s/US$ in August 2008, then fell to Rp12,100 to Rp12,600/US$ in November 2008. (5) September 2015 Major pressure on the rupiah occurred again in 2015. Up to 14 September 2015, the rupiah weakened by 15.87% throughout 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 the Chinese yuan. At a time when foreign exchange needs were high but not matched by supply in the market, there was excess demand for foreign currency, putting continuous pressure on 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 market countries. The rupiah once closed at Rp15,230/US$ on 11 October 2018. From an external perspective, the weakening of the Turkish lira, Argentine peso, and other countries’ currencies 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 rupiah exchange rate once touched Rp16,550/US$ and fell 13.67% throughout March 2020, even breaching the psychological Rp16,000/US$ level, which was the weakest since the 1998 crisis. The main trigger was global panic due to the COVID-19 pandemic. The announcement of the first case in Indonesia in early March, along with plans for activity restrictions, worsened sentiment towards economic prospects. Foreign investors withdrew large amounts of funds from the Indonesian stock market and government bonds to shift to safe havens like the US dollar. (8) May-June 2024 In June 2024, the rupiah once again broke through the Rp16,400/US$ level, 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 rate policy remaining high for longer because US inflation had not fallen as targeted. The Fed’s interest rate was recorded at 5.25% - 5.50% and held steady from July 2023 to August 2024, or about one year. This situation drove the strengthening of the US dollar and triggered capital withdrawals from developing country markets, including Indonesia.