Purbaya Explains Differences Between Current Indonesian Economic Conditions and the 1998 Crisis
Jakarta, VIVA – The recent weakening of the rupiah against the US dollar has sparked concerns among the public and market participants. Many have begun comparing the current situation to the 1998 monetary crisis that once shook the Indonesian economy.
However, the government ensures that the current national economic condition is in a very different situation. This was stated by Finance Minister Purbaya Yudhi Sadewa.
He dismissed the notion that the current rupiah depreciation is a sign of Indonesia heading towards a crisis similar to that of 1998. He assessed that Indonesia’s economic foundations today are far stronger compared to the monetary crisis period two decades ago.
“If the rupiah weakens, it is as if we are moving towards 1998 again. It is different; in 1998, the policies were wrong and socio-political instability occurred after a year of recession,” Purbaya said in Jakarta on Monday, 18 May 2026.
Purbaya explained that before the 1998 monetary crisis broke out, Indonesia first experienced an economic recession since mid-1997. This situation was then exacerbated by social and political instability, which ultimately triggered a major crisis across various sectors.
According to him, current conditions do not show similar signs. The domestic economy is considered to still be growing sufficiently well, such that the government still has room to maintain national economic stability amidst global pressures.
He emphasised that the government will continue to focus on strengthening economic foundations and maintaining various macro indicators to remain stable. Such steps are deemed important to ensure that financial market volatility does not have a significant impact on Indonesia’s economic growth.
In addition to highlighting the issue of the rupiah exchange rate, Purbaya also responded to the stock market weakness occurring during Monday morning trading. He assessed that the decline in the Jakarta Composite Index (IHSG) was more influenced by short-term sentiment rather than issues regarding national economic fundamentals.
As a form of intervention to maintain financial market stability, the government has begun entering the bond market with larger volumes. This step is being taken to maintain the state debt securities market so that foreign investors do not engage in large-scale selling due to potential capital losses.
Purbaya also urged domestic investors not to panic in the face of current market conditions. He even assessed that the stock market correction could serve as a momentum for investors to purchase shares at low prices.