Rupiah Weakens, Its Impact on the Indonesian Capital Market

JAKARTA, KOMPAS.com - Banking and consumer goods sector stocks on the Indonesia Stock Exchange (BEI) are expected to face increasing pressure as a result of the rupiah’s plunge against Uncle Sam’s currency.

The rupiah in the spot market slumped at the close of trading on Tuesday (12/5/2026). The Garuda currency closed 115 points weaker, or 0.66 percent, at Rp17,529 per US dollar.

It is even projected to weaken further, approaching Rp18,000 per US dollar.

Capital market observer Reydi Octa stated that the sectors most vulnerable to the rupiah’s depreciation are issuers with debt in US dollars, as well as those with high dependence on imports of raw materials and capital goods.

The rupiah’s weakening increases import costs and foreign currency debt payments, thereby directly pressuring companies’ profit margins while enlarging the interest burden they must bear.

“The sectors most vulnerable are issuers with large dollar debts and high import dependence, consumer goods based on imported raw materials, and issuers with high dollar capex. The rupiah’s weakening directly squeezes their margins and interest burdens,” Reydi said when contacted by Kompas.com on Tuesday (12/5/2026).

Conversely, issuers that tend to benefit are typically export-based companies and those in commodities with revenues in US dollars.

Sectors such as coal, crude palm oil (CPO), and nickel have the potential to gain because the rupiah’s weakening makes the value of dollar export revenues larger when converted to rupiah.

Moreover, companies whose majority revenues are in US dollars are considered more resilient to exchange rate pressures compared to issuers dependent on the domestic market or imported raw materials.

“Issuers that benefit are typically export-based and in commodities like coal, CPO, nickel, as well as companies with US dollar revenues,” he explained.

Furthermore, Investment Specialist at PT Korea Investment and Securities Indonesia (KISI), Ahmad Faris Mu’tashim, noted that the banking sector tends to respond negatively when the rupiah weakens.

This is because the widening exchange rate spread can prompt foreign institutions to adjust portfolios or rebalance.

This situation arises as banking stocks have a significant foreign ownership weight, so when exchange rate risks increase, foreign investors tend to reduce exposure in that sector.

Foreign selling pressure could also make banking stock movements more volatile.