Video: Businessman: Rupiah's Strength Against US Dollar "Not Doing Well"

Jakarta, CNBC Indonesia - MSCI rebalancing and the turmoil of the US vs Iran conflict, which has yet to reach a resolution, have pressured Indonesia’s capital markets, causing the JCI index to plummet to the 6,700 level and the rupiah to breach Rp17,500 per US dollar.

Apindo Economic Policy Analyst, Ajib Hamdani, stated that the rupiah’s strength against the dollar is in a “not doing well” condition. This is the impact of external sentiments due to Middle East geopolitical tensions and the delay in the Federal Reserve’s interest rate cuts.

From the internal side, sentiments related to Indonesia’s fiscal pressures from overly pushing growth at the beginning of the year, but this situation has instead increased business actors’ concerns about the fiscal capacity to support the economy until the end of the year and keep debt under control.

Meanwhile, Economist from the Center of Reform on Economics (Core) Indonesia, Yusuf Rendy Manilet, mentioned that Indonesia’s economic growth achievement in Q1-2025 at 5.61% is very positive, but the question is the government’s strength to maintain this growth.

Yusuf stated that ahead, economic challenges will be very challenging considering the Iran vs US war has the potential to continue until the end of the year. If this happens, it will pressure the exchange rate and increase fiscal pressures.

It is hoped that the government and Bank Indonesia, which are aggressive in holding back the rupiah’s depreciation, can have a positive impact. In addition, efforts are needed to attract foreign investors to reinvest capital in the country.