Rupiah Weakens Amid 5.61 Percent Economic Growth, What's Going On?
JAKARTA, KOMPAS.com - Indonesia’s economic growth in the first quarter of 2026 at 5.61 percent has raised questions among the public. The rupiah’s exchange rate weakened instead, breaching the Rp17,400 per US dollar level during trading on Monday (4/5/2026).
Nailul Huda, Director of the Digital Economy at the Center of Economic and Law Studies (Celios), assessed that there are several anomalies in the first quarter 2026 economic growth data released by the Central Statistics Agency (BPS).
According to him, this situation makes investors not fully trust the BPS data release, even though the economic growth figure is the highest since 2012.
“The negative movement of the rupiah (weakening) indicates that our economic growth is fragile and thus not trusted by investors,” Nailul told Kompas.com on Thursday (7/5/2026).
However, the rupiah moved to weaken. This condition is seen as indicating that foreign investors remain cautious about entering the domestic market because they see the foundation of economic growth as not yet strong.
“Last year, when (the economy) was reported to rise sharply in the second and fourth quarters, it was considered not to reflect the rise in Indonesia’s economy. Therefore, even though the first quarter of 2026 rose to 5.61 percent, investors look at other indicators before investing, especially those from abroad. Thus, the impetus for capital inflows tends to be low, even with capital outflows,” he explained.
Domestic and foreign investors, Nailul continued, now tend to take safe steps amid economic uncertainties globally and domestically.
This is evident from the increasing tendency of domestic investors to convert rupiah to US dollars.
“This is what causes the demand for dollars to increase, the rupiah to weaken further. Coupled with the current economic growth being overshadowed by the risk of default and government shutdown. So it is increasingly fragile,” he stated.
“If the economy is said to be strong, with true economic growth of 5.61 percent, it seems that rupiah weakening would not occur,” Nailul added.