Rupiah Weakens Amid Rising Debt Interest Burden and Middle East Tensions

Jakarta – The exchange rate of the Indonesian rupiah against the US dollar is predicted to remain volatile, though it closed weaker in today’s trading.

Based on data from the Jakarta Interbank Spot Dollar Rate (Jisdor), the rupiah stood at Rp 16,934 per US dollar on Friday, 13 March 2026, weakening by 35 points from the previous rate of Rp 16,899 on Thursday, 12 March 2026.

Meanwhile, spot market trading from Monday, 16 March 2026 until 09:09 Western Indonesian Standard Time saw the rupiah transacted at Rp 16,973 per US dollar, weakening by 15 points or 0.09 per cent from its previous position of Rp 16,958 per US dollar.

Economic and money market observer Ibrahim Assuaibi stated that the market continues to focus on the burden of debt interest payments, which constrains the government’s capacity to stimulate the economy through accelerated state spending.

Based on estimates using the budget deficit scheme minus primary balance, the realisation of debt interest payments reached Rp 99.8 trillion in February 2026. This amount represents 27.8 per cent of total state revenue of Rp 358 trillion, or 28.8 per cent when compared to the realisation of central government spending of Rp 346.1 trillion last month.

The risk of a surge in the debt interest burden has increased following the debt switch policy between Bank Indonesia and the government, as well as heightened global geopolitical tensions that could drive up the yield of government securities (SBN).

Based on data from the Ministry of Finance as of 10 March 2026, the yield on 10-year SBN stood at 6.52 per cent, whilst the yield on 10-year US Treasury bonds was at 4.09 per cent. On a year-to-date cumulative basis, SBN yields have risen by 55 basis points. The increase in SBN yields risks raising the debt servicing burden in the state budget (APBN).

Nevertheless, the government remains optimistic about debt management, handling both the portfolio and annual issuance very carefully to ensure risks remain under control, including from the perspective of managing the debt interest payment ratio (interest ratio) and Debt Service Ratio (DSR).

A concrete example is that tax revenue, which grew by 30.4 per cent in February 2026, will have a direct positive impact on improving both the debt interest payment ratio and DSR.