Rupiah Strengthens to Rp 17,865 on Positive Market Response to MBG Budget Cuts
Jakarta – The rupiah exchange rate against the US dollar is predicted to remain volatile but closed stronger in today’s trading. Based on the Jakarta Interbank Spot Dollar Rate (Jisdor) from Bank Indonesia, the rupiah was quoted at Rp 17,962 on Friday, 26 June 2026, weakening by 20 points from the previous level of Rp 17,942 on Thursday, 25 June 2026. In spot market trading on Monday, 29 June 2026, as of 09:02 WIB, the rupiah was transacted at Rp 17,865 per US dollar, strengthening by 57 points or 0.32 percent from the previous level of Rp 17,922 per US dollar.
Economic and currency market observer Ibrahim Assuaibi stated that the market responded positively to the government’s consideration of further efficiency measures and budget cuts for the flagship free nutritious meal programme (MBG) to maintain fiscal stability. The budget for the National Nutrition Agency (BGN) in the 2026 State Budget has been adjusted, with the MBG budget ceiling cut from the initial plan of Rp 335 trillion to Rp 268 trillion. Following the latest adjustments, the allocation has reportedly been further reduced to around Rp 228.38 trillion. The government is reviewing the option of an additional cut of up to Rp 50 trillion to strengthen the state’s financial position. These cuts are being implemented to respond to global economic risks, maintain the fiscal deficit, and improve programme governance.
On the other hand, Bank Indonesia (BI) has aggressively strengthened its market intervention through three main lines: the spot market, Domestic Non-Deliverable Forwards (DNDF), and the government bond (SBN) market. This aims to dampen volatility and prevent the rupiah from depreciating towards the Rp 18,000 per US dollar level. If the weakening continues, BI’s strategy is to raise the benchmark interest rate, even though the central bank has already raised it by 100 basis points in just two months. What the market currently needs is a clear anchor of expectations that exchange rate stability remains the top priority, supported by close coordination between monetary and fiscal policy. From a communications perspective, BI must continue to affirm the consistency of its policy direction, the adequacy of foreign exchange reserves and stabilisation instruments, and its commitment to ensuring that the rupiah’s weakening does not lead to a spike in inflation or disrupt financial system stability.