Rupiah and JCI Weaken; Purbaya Asserts Difference from 1998 Crisis, Urges Investors to Buy the Dip

JAKARTA — Finance Minister Purbaya Yudhi Sadewa has requested that market participants do not panic in response to the weakening rupiah and the decline of the Jakarta Composite Index (JCI), which recently opened at the 6,400 level. Purbaya assessed that Indonesia’s current economic condition differs from the 1997-1998 crisis because domestic economic fundamentals remain strong and economic growth continues to proceed. “It is fine, we will fix it later. The economic foundation is good. This is a short-term sentiment issue,” Purbaya told reporters at Halim Perdanakusuma on Monday (18/05/2026).

To maintain market stability, the government has also begun implementing larger interventions in the government bond market starting today. Purbaya revealed that the government had actually begun entering the bond market since last week, albeit on a limited scale. “Last week we entered, but only slightly; starting today, we will enter more significantly so that the bond market remains controlled,” he said. The state treasurer explained that this step is being taken to ensure that foreign investors holding government debt securities do not rush to exit due to fears of capital losses as bond prices fall. According to Purbaya, stability in the bond market can help mitigate pressure on the rupiah exchange rate.

When asked about the cause of the JCI slump, Purbaya noted that the market is currently overshadowed by sentiments of concern that the weakening rupiah could return Indonesia to a situation similar to the 1998 crisis. However, he emphasised that the current conditions are very different compared to the monetary crisis period. “If the rupiah weakens, it is as if we are moving towards a 97-98 situation again. It is different; 97-98 involved wrong policies and socio-political instability occurred after a year of recession,” he said. According to him, Indonesia had already entered an economic recession by mid-1997. Meanwhile, the domestic economy is still growing strongly, providing the government with the space to implement improvements. “We are not in a recession yet; the economy is still growing rapidly. Therefore, there is still room to fix everything,” he explained. He even urged stock market investors not to be too concerned about the current JCI correction. “I tell stock market investors: do not be afraid, buy the dip now. Looking at the technicals, it should bounce back in a day or two,” said Purbaya.