Impact of Weak Rupiah: Prepare for Squeezing Household Costs

JAKARTA, KOMPAS.com - The trend of the rupiah’s depreciation has the potential to erode people’s purchasing power. This occurs because a weakening exchange rate can raise the prices of imported goods.

The rupiah exchange rate against the US dollar, still around Rp17,300, has many parties worried about whether the weakening will persist over the long term.

Chief Analyst at Doo Financial Futures, Lukman Leong, stated that this rupiah weakening trend could increase inflation figures.

This could be compounded by rising crude oil prices.

Moreover, this rupiah weakening trend could also erode and weaken people’s purchasing power.

“Consumer confidence will decline and economic activity will slow,” he told Kompas.com on Friday (24/4/2026).

This is because many industries in Indonesia still rely on raw materials, components, and capital goods from abroad.

Not only that, several food commodities such as wheat, soy, and beef are also imported goods. A weakening exchange rate will directly push up the prices of staple goods in the domestic market.

Cited from Kontan, Lukman said that with the absence of important economic data either from abroad or domestically, sentiment will be driven by developments in the Middle East.

On the other hand, the possibility of the rupiah weakening to Rp17,500 per US dollar in the near term remains open.

“Without significant changes from domestic sentiment or still high oil prices, the rupiah could reach Rp18,000 per US dollar in the first semester,” he stated.

As a form of intervention, Lukman suggested that BI and the government raise interest rates and reduce the budget deficit.

In the current conditions, investors are advised to avoid investments in Asian currencies for now, except for the Chinese yuan.

“For major currencies, the Swiss franc (CHF) and Australian dollar (AUD) remain attractive,” he said.