Finance Minister Unconcerned as Rupiah Breaches 17,800

Finance Minister Purbaya Yudhi Sadewa stated that the current rupiah depreciation is unjustified. By the close of trading on Wednesday, 27 May 2026, the rupiah had breached 17,800 against the US dollar. Purbaya expressed confusion over the rupiah’s weakness despite strong economic fundamentals. ‘It doesn’t make sense. Depreciation usually occurs when there are disruptions to economic fundamentals,’ he said after attending Idul Adha prayers at the Tax Directorate General headquarters in Jakarta on Wednesday, 27 May 2026. However, Purbaya said he is not concerned, confirming the government does not need to revise the 2026 State Budget assumptions despite the rupiah crossing 17,800 per US dollar. The impact of the rupiah’s fall was already factored in due to soaring global oil prices to $100 per barrel amid escalating US-Iran tensions. The rupiah’s plunge had previously weakened government bond values, but the Finance Minister assured that yields have stabilised following intervention by the ministry. He is confident these measures have successfully attracted foreign capital into Indonesia’s financial markets. The 2026 State Budget’s macroeconomic assumptions set the rupiah target at 16,500 per US dollar, with an upper limit of 16,800. However, the Indonesian currency has since moved significantly further from this target. Previously, Traze Andalan Futures Director Ibrahim Assuabi had predicted the rupiah would continue weakening during the extended holiday week due to sustained external pressures. With Idul Adha causing domestic market closures, he noted Bank Indonesia could only intervene in international markets, leading to further rupiah depreciation. Assuabi added that today’s sharp rupiah decline was influenced by Middle East tensions and rising global oil prices, forecasting a new low of 18,000 per US dollar this week.