Rupiah Weakens Further Against Dollar: Three Tips for the Middle Class
The US dollar continues to push the rupiah to record lows, with the exchange rate projected to exceed Rp18,000 per dollar next week. As of Saturday, 30 May 2026, the rate stood at Rp17,881 per dollar.
According to detikFinance, INDEF Senior Economist Tauhid Ahmad has issued advice for Indonesia’s middle class amid the rupiah’s weakness, highlighting three key areas to avoid.
- Reduce Spending on Imported Goods
Tauhid explained that currency exchange rate fluctuations affect the domestic economy through several channels, particularly trade. A weaker rupiah increases the cost of imported goods and raw materials.
Prices of imported goods and raw materials automatically rise significantly due to the rupiah’s weakness, potentially driving up overall prices and causing inflation.
‘For example, electronics and food items such as soybeans will see price hikes. Electronics prices rise because some components are imported. Essentially, imported products will become more expensive, leading to import-driven inflation,’ Tauhid stated on 30 May 2026.
Imported goods will inevitably cost more as the US dollar strengthens against the rupiah. By reducing spending on such items, the middle class can better manage their budgets.
‘Avoid these as the mentioned price increases mean being more stringent with discretionary spending, especially on imported goods,’ Tauhid added.
Similarly, Bhima Yudhistira, Founder and Executive Director of CELIOS, said the middle class should curb spending, particularly on imported goods.
‘The middle class should prepare for tough times. Buy only essential daily items, avoid promotional deals, especially on imported goods,’ Bhima said.
- Avoid Floating-Rate Loans
The dollar’s rise has forced Bank Indonesia (BI) to raise interest rates significantly, with a 50 basis point increase taking the rate to 5.25%.
‘Interest rates will inevitably rise, particularly on loans. Mortgages, consumer credit, and investment loans will all become more expensive, with these consequences,’ Tauhid explained.
As BI’s rate hikes due to the rupiah’s weakness push up loan interest rates, it is advisable to seek fixed-rate loans.
‘If you have existing loans, opt for fixed rates that are manageable rather than floating ones. Floating rates will rise with interest rate hikes, so for car loans, mortgages, or similar, choose fixed rates,’ Tauhid said.
- Do Not Rely on a Single Income Source
Alongside tightening belts by reducing expenses, increasing income should also be prioritised.
‘The middle class is already seeking additional income streams, as controlling consumption alone without boosting earnings could lead to financial strain,’ Tauhid said.
‘Therefore, they must seek business opportunities or other income sources in sectors like services to supplement earnings. Many in the middle class are turning to ride-hailing or small-scale trading as supplementary income,’ he added.