Rupiah Weakens Against Singapore Dollar: Implications for Indonesia

Jakarta, Kompas.com - The weakening of the rupiah against the Singapore dollar is seen as a new warning signal that requires attention from the government and market participants. The pressure on the Indonesian currency is not only coming from the strengthening US dollar but also from regional currencies in Southeast Asia. Economic observer Rahma Gafmi from Airlangga University said that rupiah’s weakness has traditionally been linked to the Federal Reserve’s high interest rate policy and global geopolitical tensions driving the US dollar’s strength. He said this phenomenon indicates a divergence in economic strengths at the regional level. Moreover, Singapore is a major financial and trading hub in the region with close ties to Indonesia. ‘The rupiah is not only succumbing to the US dollar but also increasingly powerless against the Singapore dollar,’ Rahma said in a statement onThursday (28 May 2026). However, the rupiah has weakened over 5% year-to-date against the US dollar. Even compared to most regional currencies, the rupiah is one of the hardest hit in Asia this year. The rupiah has only appreciated 0.8% against the Indian rupee year-to-date. ‘The biggest weakness is against the Malaysian ringgit, followed by the Singapore dollar, then Hong Kong dollar and yuan,’ he said during a media briefing in Makassar on 22 May 2026. Rahma explained that a key factor making the Singapore dollar more resilient is the difference in monetary policy between Indonesia and Singapore. While Bank Indonesia (BI) uses interest rates as its main tool to control inflation, the Monetary Authority of Singapore (MAS) primarily uses exchange rates as its monetary policy instrument.