Strong Indonesian Economic Fundamentals Should Support Rupiah Strengthening, says Purbaya

Finance Minister Purbaya Yudhi Sadewa stated that the Indonesian rupiah should strengthen given the nation’s robust economic fundamentals.

In reality, the rupiah weakened by 39 basis points, or 0.23 per cent, closing at Rp 16,997 per US dollar on Monday, down from the previous close of Rp 16,958 per dollar.

“When the economy is running strongly, increasingly so, the fundamentals should be sound. Under normal circumstances, the rupiah should strengthen,” Purbaya said at the Coordinating Ministry for Economic Affairs office in Jakarta on Monday, 16 March 2026.

Nevertheless, Purbaya deferred intervention strategy decisions to Bank Indonesia (BI), the central bank responsible for maintaining rupiah exchange rate stability. He stated he would not comment further to avoid speculation about government intervention in monetary policy.

“I don’t know why the rupiah weakened. You should ask the central bank. Because the central bank’s responsibility is singular: maintaining exchange rate stability,” he said.

Previously, economist and money market observer Ibrahim Assuaibi attributed the rupiah depreciation to escalating geopolitical conflict in the Middle East between Iran and the US-Israel alliance, particularly in the Strait of Hormuz. US Marines were reported to be deployed towards Iran to conduct attacks, with the US-Israel coalition continuing tit-for-tat strikes with Iran in the ongoing confrontation.

“This indicates that Iran remains capable of mounting resistance,” Ibrahim told media on Tuesday, 17 March 2026.

Meanwhile, US President Donald Trump also offered a US$10 million reward to anyone providing information on the whereabouts of Iran’s new leader. This action by Trump significantly escalated tensions in the Middle East.

“The rupiah currency remains volatile but closed weaker in the range of Rp 16,990-Rp 17,050,” he said.