Rupiah Depreciation: Finance Minister Says Performance Still Better Than Several Peer Nations

Finance Minister Purbaya Yudhi Sadewa has stated that amid escalating global dynamics and geopolitical tensions, pressure on the domestic financial sector remains manageable.

According to the minister, the rupiah has depreciated moderately in line with the global strengthening of the US dollar. Purbaya argued that rupiah depreciation is relatively better compared with many peer nations.

“This reflects Indonesia’s external resilience and strong fiscal-monetary coordination,” the finance minister said during a press conference on the State Budget at the Finance Ministry headquarters in Jakarta on Wednesday, 11 March.

He explained that the rupiah’s depreciation against the US dollar since the Israel-US versus Iran conflict has been recorded at 0.3 per cent. This, he said, is far better than the currency depreciation of neighbouring countries such as Malaysia at -0.5 per cent, Thailand at -1.6 per cent, and others.

“So we are still doing reasonably well. It’s not just about looking at the level, but how much the impact of the weakness is. From that perspective, we are still doing reasonably,” said Purbaya.

“Although people scold me on TikTok, saying ‘hey Pak Purbaya, finance minister, what are you doing with the rupiah,’ we must assess fairly what is happening compared with other countries around the world. We are still okay, meaning we are still considered to be maintaining good fiscal and monetary policies and a solid economic foundation,” he emphasised.

On the opening of trading on Wednesday, 11 March, the rupiah exchange rate was recorded at Rp16,851 per US dollar, strengthening by 12 points or 0.07 per cent from the previous close at Rp16,863 per US dollar.

The risk-off sentiment among investors is attributed to the escalation of the Middle East conflict and the high yields on US Treasury bonds resulting from expectations that the Federal Reserve will keep interest rates elevated.