Rupiah Plummets, Middle Class at Risk of Downgrading as Purchasing Power Squeezed

JAKARTA - The continued weakening of the rupiah is feared to have broader impacts on the economy of the people. The pressure is not only occurring in financial markets and the business world. The rupiah’s depreciation is also feared to cause more middle-class citizens to downgrade their status due to eroded purchasing power and rising living costs. The rupiah exchange rate in the spot market closed weaker again on Friday (29/5/2026). The rupiah depreciated 35 points or 0.20% to Rp 17,880 per US dollar (USD). A few minutes before closing, the rupiah rate touched Rp 17,893 per USD, down 48 points or 0.27%. “Is the middle class already at risk of downgrading due to these pressures? Yes, it’s very clear,” Ibrahim said. The phenomenon did not happen suddenly. Recent rupiah depreciation has increased costs for various goods and services. Meanwhile, people’s ability to raise income has not kept pace with rising expenses. One indicator of worsening economic conditions is the rising number of unemployed and layoffs across sectors. Ibrahim said the number of layoffs from January to March 2026 had exceeded 14,000. New waves of layoffs are still at risk in the coming months and could worsen the labour market. “Many middle-class people are downgrading to the lower class. What’s the proof? Unemployment from January to March has already exceeded 14,000,” he added. “Moreover, it’s likely that 9,000 more will face layoffs in the next two months, but only those known so far. The unknown cases haven’t been counted yet. This will likely affect what? The purchasing power of the public, which will definitely decline,” he said.