House of Representatives Commission XI Chairman Says Current Rupiah Situation Differs from 1998

Chairman of House of Representatives Commission XI, Mukhamad Misbakhun, stated that the current rupiah depreciation differs from the 1998 economic crisis despite both reaching around Rp17,000 per US dollar. Mukhamad Misbakhun said the rupiah’s depreciation in 1998 was far more significant compared to this year’s gradual weakening. According to Kompas records, the rupiah exchange rate plummeted 690%, nearly sevenfold, from around Rp2,441 per US dollar in June 1997. Meanwhile, Bank Indonesia (BI) data shows a year-to-date depreciation of 5.4% as of 18 May 2026. He explained that current economic conditions differ from those in 1998. During the 1998 monetary crisis, many people rushed to withdraw funds from banks and financial institutions en masse, known as a ‘bank run’. Currently, the economy is stable with national growth of 5.61% in the first quarter of 2026, and the banking sector remains under the supervision of the Financial Services Authority (OJK). ‘We must make this clear to the public: do not let them perceive the rupiah’s current state as a harbinger of crisis, triggering psychological panic,’ he said. Since 1998, the government has implemented various reforms to prevent a recurrence. This included establishing the Financial Services Authority (OJK), which took over banking regulation and supervision from Bank Indonesia (BI), with OJK responsible for microprudential oversight and BI for macroprudential. The creation of the Deposit Insurance Agency (LPS) has also enhanced public confidence in bank deposits. ‘We have faced multiple crises, including the Covid-19 pandemic, without being overwhelmed by financial or social turmoil because we have consistently implemented structural and adequate responses, making the financial system increasingly robust and regulated transparently with broad stakeholder participation,’ Misbakhun said. In Monday’s (25 May 2026) spot trading, the rupiah closed 27 points or 0.15% weaker at Rp17,744 per US dollar.