Rupiah Strengthening Must Come Through Measured Economic Policy, Not Political Pressure: Analyst

Jakarta, VIVA – The weakening of the rupiah exchange rate and the decline in the Indonesia Stock Exchange (IHSG) have prompted some student groups to call for a ‘Reformasi Jilid 2’ movement. The Central Java chapter of the All-Indonesia Student Executive Board (BEM SI) even issued an ultimatum to the government and Bank Indonesia to rectify the situation within 18 days.

Responding to this, the Executive Director of the National Data Index, Ayip Tayana, said he appreciated the students’ aspirations but stressed that such an ultimatum would not strengthen the rupiah. He argued that bolstering the currency cannot be achieved through political pressure, but rather requires measured economic policies.

‘The rupiah will not strengthen because of an ultimatum from students. It will strengthen through market confidence, political stability, and disciplined fiscal policy. If the rupiah weakens and the answer is Reformasi Jilid 2, that is not a solution; it is part of the problem itself,’ Ayip said in a statement on Friday, 12 June 2026.

He explained that such student actions could lead to political instability. If that occurs, the inflow of foreign capital would be hampered, ultimately pushing the rupiah weaker. ‘The financial market is very sensitive, and political stability is highly influential. Investors will watch this. If the narrative that emerges is a threat of Reformasi Jilid 2, investors could hold back or even withdraw their funds abroad,’ he stated.

Ayip further noted that if the student demands culminate in a discourse of unseating the government, it becomes irrelevant to the current economic problems. ‘The action by BEM SI is relevant if its aim is to remind the government to improve the economy, but it becomes irrelevant if rupiah fluctuations are used as an entry point to build a narrative of impeachment or ousting the government,’ he said.

He observed that today’s economic conditions are vastly different from the 1998 monetary crisis. While there are economic challenges, support for the government remains strong and there is no crisis of political legitimacy. Consequently, any effort to remove the government would be difficult to achieve. ‘The Prabowo-Gibran administration still has strong electoral legitimacy, around 72 percent. Moreover, the party coalition is very large, with almost all parties supporting the government. There is no crisis of political legitimacy, so it is difficult for that to happen,’ he concluded.