Not Comparable to the 1998 Crisis, Purbaya: Economic Foundations Remain Strong
Finance Minister Purbaya Yudhi Sadewa has emphasised that the current weakening of the rupiah exchange rate cannot be equated to the conditions of the 1998 monetary crisis, as the national economic foundations are deemed to remain strong.
“If the rupiah weakens, it seems as though we are moving towards a repeat of 1998. However, the conditions are different. In 1998, economic policies at the time were problematic, and socio-political instability occurred after Indonesia experienced a prolonged recession,” said Purbaya following an aircraft handover ceremony at Halim Perdanakusuma Air Force Base, Jakarta, on Monday (18/05/2026).
Purbaya explained that in mid-1997, Indonesia underwent an economic recession which was subsequently followed by socio-political instability, triggering the 1998 monetary crisis. According to him, the current domestic situation is different because national economic growth remains stable, allowing the government sufficient space to improve various macroeconomic indicators affected by global market volatility.
Regarding the decline of the Jakarta Composite Index (JCI), which touched the 6,628 level at the start of trading on Monday morning, Purbaya assessed that such fluctuations are more influenced by short-term market sentiment. He stated that the government will remain focused on maintaining the foundations of the national economy to ensure economic growth targets are met amidst global financial market dynamics.
As a market intervention measure, Purbaya stated that the government has begun increasing purchases in the bond market to maintain the stability of the government securities market and reduce selling pressure from foreign investors. This step is being taken to minimise the potential for capital losses resulting from declining bond prices.
He also urged capital market players and domestic investors not to panic in the face of short-term stock market corrections. “The government continues to monitor market conditions and maintain economic stability. Therefore, investors are expected to remain calm in facing current market dynamics,” Purbaya added.
Based on money market data on Monday morning, the rupiah exchange rate weakened by 33 points or 0.19 per cent to Rp 17,630 per US dollar, down from the previous trading close of Rp 17,597 per US dollar.