Purbaya Assures Indonesia's Condition Differs from 1998 Crisis Despite Rupiah Weakening

JAKARTA — Finance Minister Purbaya Yudhi Sadewa has addressed concerns regarding the exchange rate of the rupiah against the US dollar, which some have compared to the conditions seen in 1998. This statement was made in response to sentiments affecting the Jakarta Composite Index (IHSG), which opened weaker in trading on Monday (18/05/202<0xC2>6).

According to Indonesia Stock Exchange (BEI) data, during pre-opening trading, the IHSG fell by 94.344 points, or 1.40 per cent, to the level of 6,628.976. Purbaya stated that the current economic situation differs from the 1997-1998 crisis because Indonesia has not entered a recession and economic growth remains ongoing.

“There are many sentiments regarding the IHSG weakening, suggesting that if the rupiah weakens, we might move towards a 1997-1998 scenario again. It is different; in 1997-1998, policies were incorrect and socio-political instability occurred after a year of recession. By mid-1997, we were already in recession,” said Purbaya at Halim Perdanakusuma Air Force Base, East Jakarta, on Monday. “We are not in a recession now; the economy is still growing strongly. Therefore, there is still room to rectify everything.”

Purbaya also urged capital market investors not to panic in the face of the IHSG’s decline. “If I say do not be afraid, buy the dip now. Looking at the technicals, it should recover in a day or two. So, do not forget to buy stocks,” he asserted.

For context, in 1998, the rupiah plummeted to approximately Rp 17,000 per US dollar. However, during the presidency of Indonesia’s third president, BJ Habibie, the rupiah gradually strengthened back to the range of Rp 6,500 per US dollar over a period of about 17 months.

The rupiah weakened by 1.17 per cent compared to the previous trading session, marking its weakest intraday level in the spot market, hitting a new all-time low. Year-to-date (YTD) since the start of 2026, the rupiah has dropped by 5.99 per cent against the US dollar. Since October 2024, the rupiah has depreciated by approximately 12 per cent, moving from around Rp 15,400 per US dollar to its current level of Rp 17,600 per US dollar. According to Bloomberg data, the rupiah exchange rate in the spot market depreciated by 77 points to Rp 17,674 per US dollar as of 12:17 WIB during Monday afternoon trading.