Dollar Surpasses Rp 17,800 as Businesses Face Rising Threats
Rupiah continued to depreciate on the first trading day after the Idul Adha holiday on 27-28 May 2026, opening at Rp17,800 per US dollar, a 0.14% decline.
The US dollar index (DXY), which measures the greenback’s strength against six major currencies, remained stable. As of 9:00 AM WIB, the DXY stood at 98.974, following a 0.19% drop in the previous session.
Fakhrul Fulvian, Head Economist at Trimegah Securities Indonesia, stated that the rupiah is currently in an overshooting phase, with its depreciation exceeding what long-term fundamentals justify.
He explained that this situation is not merely due to poor economic fundamentals but reflects how markets perceive a combination of global pressures, domestic policy direction, and uncertainty in economic adjustment processes.
“Financial markets don’t just read today’s data; they assess policy direction, response credibility, and a nation’s ability to maintain stability amid rapid global changes,” he told CNBC Indonesia on Friday, 29 February 2026.
Fakhrul noted that the rupiah has become the primary adjustment point for various pressures that should ideally be spread across multiple economic sectors.
He explained that in normal circumstances, when global energy prices rise, some pressure manifests in inflation, fiscal policy, domestic prices, and exchange rates. However, with cautious domestic adjustments to preserve social stability and purchasing power, the burden has shifted disproportionately to the rupiah.
“The rupiah has become the main shock absorber. Inflation and energy prices are being contained, but the economic pressure hasn’t disappeared—it’s shifted to the exchange rate,” he said.
This explains why the rupiah’s depreciation appears significantly larger compared to other economic indicators.
Impact on the Real Sector
Fakhrul argued that pressure on the real sector is becoming a serious issue as businesses face dual pressures simultaneously.
On one hand, rupiah depreciation increases costs for imported raw materials, energy, machinery, and logistics. On the other, rising interest rates and high yields have elevated financing costs.
This combination is particularly burdensome for manufacturing, property, construction, retail, and highly leveraged sectors.
“If this situation persists, companies will not only face margin pressures but also scale back expansion, reduce investment, and adopt more defensive hiring practices,” he said.
He advised businesses to focus on operational resilience rather than short-term aggressive expansion.
He suggested companies should maintain liquidity, manage foreign exchange risks, enhance efficiency, and avoid excessive leverage.
However, he also noted that overshooting phases often create significant asset accumulation opportunities for financially sound businesses.
“Each overshooting phase typically presents asset accumulation opportunities for prepared businesses,” he added.