Rupiah and JCI Under Pressure, DPR Budget Committee Urges Openness to Criticism

The Budget Committee of the Indonesian House of Representatives has urged all parties to be open to criticism and input in addressing the strength of the US dollar, high yields on government bonds, and the weakening of the Jakarta Composite Index. “This serves as a reflection for ourselves,” said Committee chairman Said Abdullah in a statement received in Jakarta on Wednesday. He noted that Indonesia is currently facing serious pressure on the rupiah’s exchange rate against the US dollar and sovereign bond yields, whilst the stock market is also showing a weakening trend. According to Said, Indonesia need not point fingers at external sentiment, such as the hawkish policy of the US Federal Reserve or ongoing conflict in the Gulf region, as these factors lie beyond the government’s control. Therefore, he stressed, what is needed is to prepare more planned measures with sound execution to tackle the strong dollar, high bond yields, and falling stock index. To address these conditions, Said recommended the government restore business confidence through three main steps. First, maintain policy consistency. He believes policy uncertainty poses a major risk for business actors, suggesting the government should not announce premature policies and should prioritise productive multi-stakeholder dialogue on every policy plan. Second, manage sound fiscal policy. The Budget Committee appreciates the government’s proposal to set the deficit in the 2027 Draft State Budget at around 1.8 percent to 2.4 percent of Gross Domestic Product. “This is good news. Hopefully it will reassure the market,” he said. Moreover, he added, should this year’s deficit realisation come in lower, at least around 2.58 percent, compared to the 2026 state budget target of 2.68 percent and the 2025 realisation of 2.81 percent, it would demonstrate a positive fiscal trend. Furthermore, market players are also expecting governance reforms in various priority programmes such as the Free Nutritious Meals programme and the Merah Putih Village/Subdistrict Cooperatives. Said advised the government to improve implementing capacity, avoid conflicts of interest, build supply chain ecosystems, and focus more on target beneficiaries and priority regions. Third, in the capital market sector, the Budget Committee encourages the Financial Services Authority to continue improving exchange governance, increase share ownership transparency, raise the public free float portion above 15 percent, and constantly evaluate and improve the self-regulatory organisations in Indonesia’s capital market.