Rupiah Under Pressure, Economist Outlines Necessary Steps

The depreciation of the rupiah against the United States dollar is seen as an important reminder of the need to strengthen the fundamentals of the national economy. Exchange-rate stability is said to depend not only on monetary policy but also on market perceptions of overall economic governance.

The economist, who is also the Chairman of the Advisory Council of the Nusantara Bumiputera Entrepreneurs Association (Asprindo), Prof Didin S Damanhuri, said the rupiah’s movement to around Rp17,600 per US dollar represents the accumulation of various domestic and global factors. He added that the dynamics should be viewed as a moment for joint evaluation to bolster market confidence.

“This is a chain of problems related to the structural fundamentals of the country’s economy — both monetary and fiscal — and the trust of rating agencies and other countries in Indonesia. This is about how the Indonesian government can demonstrate governance,” Didin said on Wednesday (20/5/2026).

He explained that rupiah depreciation is not only influenced by monetary policy, but involves many interconnected factors, including global economic conditions and investor perceptions of domestic economic stability.

In addition to domestic factors, Prof Didin notes that global geopolitical uncertainty also exerts pressure on economic stability, particularly through rising energy prices that trigger imported inflation.

“As a result of the conflict, an energy crisis occurs, which ultimately leads to imported inflation. Furthermore, Indonesia not only imports energy but also a variety of other staple commodities,” he said.