How to Mitigate the Impact of Rupiah Weakness on Food Prices
Coordinating Minister for Food Affairs Zulkifli Hasan stated that the government will provide subsidies if food prices increase due to the weakening of the Rupiah against the dollar.
“There is a budget for unforeseen disasters. So, it will be subsidized,” said Zulkifli, in Jakarta, Wednesday, May 13, 2026.
Zulkifli gave the example that the intervention could be in the form of subsidies for food transportation costs. The PAN politician, who is usually called Zulhas, said that food subsidies would be provided by the central government, provinces, and regions.
Meanwhile, Trade Minister Budi Santoso stated that current food prices have not been affected by the weakening of the Rupiah. “So far, it has been normal, there are no problems,” he said.
Data from the Ministry of Trade as of May 12, 2026, shows that several food commodities have experienced price fluctuations. The increase in prices occurred in bulk palm cooking oil, namely IDR 19,560 per liter or an increase of 0.17 percent compared to May 11, 2026.
The price of imported commodities such as soybeans has also increased. The price of soybeans as of May 12, 2026, was recorded at IDR 13,607 per kilogram. In addition to increasing by 0.19 percent daily, the current price of imported soybeans is moving away from the reference purchase price (HAP) set at IDR 11,400-12,000 per kilogram.
The Rupiah exchange rate on Tuesday morning, May 12, 2026, reached a new psychological level by moving above 17,500 against the US dollar. Google data shows that until 11:00 a.m., the Rupiah weakened to 17,509 per dollar, while Bloomberg data stated that the Rupiah spot at the same time was recorded at 17,512 per dollar or weakened by 98 points.
Chief Economist of Permata Bank, Josua Pardede, stated that the pressure in the Indonesian financial market, especially the weakening of the Rupiah exchange rate, was caused by global and domestic factors.
Josua said that, from a global perspective, the weakening of the Rupiah exchange rate was triggered by energy inflation, expectations of global interest rates, and demand for the US dollar. “In the end, there will be a shift or transfer from investors who previously placed assets in developing countries, and they will move them to safe assets,” he said on Tuesday, May 12, 2026.
This condition makes the Rupiah and Asian currencies as a whole tend to weaken. Therefore, the Rupiah is not the only currency that has fallen against the US dollar when looking at current global factors.
The pressure on the Rupiah is not only due to monetary issues, but also triggered by assessments from international institutions. Among them is the assessment from Morgan Stanley Capital International (MSCI) regarding ownership and the number of shares. As a result, from the beginning of the year to April 2026, there has been an outflow of foreign capital from the Indonesian financial market.
In addition to MSCI, international rating agencies Moody’s and Fitch Ratings at the beginning of this year cut the outlook for the country’s debt from stable to negative. The assessment of these international institutions is related to the credibility of the government’s policy mix.
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These things, from global risks to assessments or warnings from institutions towards Indonesia, have a significant impact on the exchange rate. “So this has a fairly massive impact on the risk appetite of foreign investors, especially for our Rupiah-denominated assets,” he said.
The outflow of capital from January to early May caused the Rupiah to continue to weaken. In the stock market, foreign capital outflows amounted to around US$2.2 billion. In the bond market, capital outflows were also almost US$0.7 billion, but it is still supported by inflows in short-term SRBI.
Based on PIER’s records, the Rupiah has weakened by 3.9 percent compared to the beginning of the year or year-to-date. Until trading on Tuesday afternoon, May 12, 2026, the Rupiah closed at the level of 17,529 per US dollar or weakened by 115 points.
Ilona Estherina contributed to the writing of this article.
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