Rupiah Weakens Following Fitch Report on Indonesia's Economic Governance

The rupiah exchange rate weakened at the close of trading on Monday, falling 32 points or 0.18 percent to Rp17,995 per US dollar from the previous close of Rp17,963 per US dollar.

Money market analyst Ibrahim Assuaibi stated that the depreciation was influenced by a negative market response to the latest Fitch Ratings report on Indonesia’s economic conditions. “Fitch Ratings, in its latest report, provided an in-depth view of the fragility of Indonesia’s macroeconomic conditions, seen through indicators such as the weakening rupiah, declining foreign exchange reserves, and massive capital outflows. However, Fitch’s real concern lies in the weakening investor confidence due to deteriorating economic governance,” he said in a written statement in Jakarta on Monday.

The rating agency warned that prolonged pressure could increase government debt and borrowing costs, while also heightening the risk of a downgrade to Indonesia’s sovereign rating, which was maintained at BBB with a negative outlook in March 2026.

Beyond Fitch Ratings, he noted that the market was also unsettled after Indonesia’s trade balance recorded a deficit of 1.61 billion US dollars in May 2026, ending a 72-month consecutive surplus streak.

On the global front, geopolitical tensions are heating up due to the war between Russia and Ukraine ahead of the NATO Summit in Turkey. Additionally, uncertainty surrounding the agreement between the US and Iran regarding the Strait of Hormuz is limiting the decline in crude oil prices.

The Jakarta Interbank Spot Dollar Rate (JISDOR) set by Bank Indonesia also weakened today to Rp17,999 per US dollar from the previous level of Rp17,960 per US dollar.