Rupiah Continues to Fall, MP Urges Government to Take Action!

Jakarta, VIVA – The surge in the exchange rate of the United States (US) dollar, exceeding a new psychological level of Rp17,600 by Friday, 15 May 2026, has triggered deep concern among members of parliament.

Member of Commission XI of the DPR RI faction, Erik Hermawan, reminded the government and monetary authorities to immediately strengthen policy measures to mitigate the impact on macroeconomic stability and public purchasing power.

Erik emphasised that the current weakening of the Rupiah is driven by a double pressure, namely external factors in the form of escalating global geopolitics in the Middle East which triggers capital outflow, as well as domestic factors related to perceptions of future fiscal risk.

Given that the national industrial structure still has a high dependence on imported raw materials, reaching 70 per cent in the chemical, textile, electronics and pharmaceutical sectors, this depreciation is certain to increase production costs.

“We are facing a real threat of inflation in imported goods. When capital and raw material costs rise due to the weakening Rupiah, producers are faced with a difficult choice: eroding profit margins or passing on these costs to consumers through price increases. At the grassroots level, food commodity artisans such as tofu and tempeh have begun to struggle to cope with domestic soybean prices which have soared far above international prices,” said Erik Hermawan in his official statement, Sunday, 17 May 2026.

As part of Commission XI, which oversees finance and banking, Erik appreciated the seven tactical steps that have been prepared by Bank Indonesia (BI), including foreign exchange market intervention and tightening dollar liquidity.

However, he underlined that exchange rate stability cannot only rely on monetary instruments alone. He mentioned the need for aggressive fiscal synergy from the Ministry of Finance to maintain short-term sustainability.

Erik encouraged the government to immediately activate the Bond Stabilization Fund (BSF) mechanism in an accountable manner to dampen volatility in the Government Securities Market (SBN).

In addition, he urged the use of emergency or unforeseen budget allocations to realise subsidies for logistics and food distribution costs, especially for staple commodities whose retail prices have begun to exceed the Highest Retail Price (HET).