Investor Confidence Declines, Rupiah Continues Under Pressure

Researcher from the Center of Macroeconomics and Finance at INDEF, Abdul Manap Pulungan, assesses that the pressure on the rupiah exchange rate arises not only from monetary factors but also reflects broader structural issues. Manap states that the current situation indicates a decline in investor confidence in the domestic economy.

“The rupiah problem is not just from the monetary side. There are many things, for example, heavy fiscal issues, energy resilience problems, which ultimately make investors assess that this is not the right time to accumulate portfolios in Indonesia,” said Manap during a discussion titled “2 Months of the Israel-US vs Iran War: Beware of Impacts on the Economy!” in Jakarta on Thursday (30/4/2026).

Manap explains that the rupiah’s weakening is worsened by the continuous outflow of foreign capital. He notes that investors are starting to offload their portfolios in the domestic market, thus deepening the pressure on the rupiah.

“This also serves as a signal to the government; the level of global investor confidence in Indonesia is declining, as seen from how investors are offloading domestic portfolios, causing the rupiah to plummet further,” he continued.

According to Manap, the current financial sector conditions also do not support capital inflows. Previously, there were three main sources of capital inflow: stocks, SRBI, and SBN; now, only SBN remains relatively stable.

“Now, only SBN is still positive; SRBI and stocks are weakening, so it’s uncertain,” said Manap.

In this situation, Manap emphasises the importance of coordinated cross-sectoral steps. He states that market interventions alone are insufficient to withstand the rupiah’s pressure.

“One of the things that needs to be done after market interventions is for BI, the Ministry of Finance, or KSSK to provide positive signals, but signals that are truly concrete, not just narratives,” Manap stressed.