Government Targets Rupiah Exchange Rate Between Rp 16,800 and Rp 17,500 for 2027

The government is targeting the rupiah exchange rate against the US dollar to move within the range of Rp 16,800 to Rp 17,500 under the Macroeconomic Framework and Fiscal Policy Main Points (KEM-PPKF) for the 2027 fiscal year. This macro assumption was set amidst significant pressure on the domestic currency, which recently hit a historic low of Rp 17,706 per US dollar at the close of spot market trading in mid-May 2026.

“Our fiscal and monetary strategies must be capable of keeping our exchange rate stable against global currencies,” stated the President during the DPR RI Plenary Session while presenting the 2027 KEM-PPKF document in Jakarta on Wednesday (20/5/2026).

Through a measured fiscal policy mix, the government also projects that domestic inflation can be strictly controlled within the 1.5 to 3.5 per cent range to support the stability of public purchasing power and the exchange rate. This rupiah exchange rate assumption complements other fiscal macro indicators, including a target for 10-year Government Securities (SBN) interest rates set within the 6.5 to 7.3 per cent range.

Regarding the fiscal posture, the government plans for the 2027 State Budget (APBN) deficit to be between 1.80 and a maximum of 2.40 per cent of GDP. This figure represents a strong commitment to continue reducing the budget deficit, noting that the 2025 deficit realisation reached 2.92 per cent, which was 0.8 per cent below the maximum 3 per cent threshold.

State expenditure is allocated between 13.62 and 14.80 per cent of GDP to fund national priority programmes, while state revenue is targeted to reach between 11.82 and 12.40 per cent of GDP. Through such sustainable fiscal management, the government is optimistic that national economic growth can reach the 5.8 to 6.5 per cent range in 2027, serving as a stepping stone towards the 8 per cent growth target by 2029.

In the energy commodity sector, fiscal stability will be supported by assumptions of Indonesian crude oil prices between 70 and 95 US dollars per barrel, an oil lifting target of 602,000 to 615,000 barrels per day, and gas lifting of 934,000 to 977,000 barrels of oil equivalent per day.

The President emphasised that exchange rate stability and economic growth are aimed at reducing poverty to the 6.0 to 6.5 per cent range and lowering the open unemployment rate to between 4.30 and 4.87 per cent.

President Prabowo Subianto personally presented the macroeconomic framework and fiscal policy main points (KEM-PPKF) for the 2027 Draft State Budget (RAPBN) during the 19th Plenary Session of the DPR RI. President Prabowo also became the first Indonesian President to present the introduction of the RAPBN, including the macroeconomic framework and fiscal policy main points, directly before the members of the DPR RI. The meeting was attended by 451 members of the DPR RI, establishing a quorum as declared by the Speaker of the DPR RI, Puan Maharani.