Weakest in Asia, Rupiah Hits Worst Level Since 1998
Jakarta, CNBC Indonesia - This week has been particularly tough for the Garuda currency, the rupiah, which also hit its worst level since 1998 during this period.
According to Refinitiv, on Friday (10/4/2026), the rupiah closed with a slight weakening of 0.03% at Rp17,085/US$. This position marks the worst since the 1998 crisis. Even on Tuesday’s trading (7/4/2026), the rupiah was far worse than in 1998.
Throughout this week, the rupiah remains in the doldrums, weakening 0.56% on a point-to-point basis.
In addition to being the worst since 1998, the rupiah was also the worst performer among other Asian currencies this week. The Asian currencies that weakened this week include the rupiah, Indian rupee, and Vietnamese dong.
Meanwhile, the Thai baht was the strongest gainer this week, surging 2.11%, followed by the South Korean won which rose 1.71%.
The strength of Asian currencies, except for the rupiah, occurred amid the sluggish US dollar throughout this week. The US Dollar Index (DXY), which measures the dollar’s strength against six major world currencies, was observed weakening 0.12% to 98.69 in yesterday’s trading. Over the past week, the US dollar has already corrected by 0.53%.
The rupiah’s weakening throughout this week is influenced by a combination of external and domestic sentiments. Externally, the market is still overshadowed by global uncertainties despite the US dollar index tending to weaken slightly.
Meanwhile, domestically, sentiment comes from the latest World Bank report which slashed Indonesia’s economic growth projection for 2026 to 4.7%, lower than the previous estimate of 4.8% and also below the government’s target in the 2026 state budget of 5.4%.
In the April 2026 edition of the East Asia & Pacific Economic Update report, the World Bank assesses that Indonesia’s economic growth will be pressured by rising oil prices due to the escalation of conflict in the Middle East. This pressure is deemed to be only partially offset by commodity revenues and government investment initiatives.
“Indonesia’s economic growth is projected to slow to 4.7% due to pressures from higher oil prices and risk aversion sentiment, which will only be partially offset by commodity revenues and government investment initiatives,” the World Bank wrote in its report, quoted on Thursday (9/4/2026).
The World Bank also highlighted pressures on the rupiah, among others triggered by market concerns over fiscal policy and capital outflows following MSCI’s decision to freeze Indonesian securities from its index. This condition is seen to have prompted Bank Indonesia to intervene to maintain exchange rate stability.
The rupiah at the psychological level of Rp17,000/US$ is not just a psychological number, but also reminds us of one of the most difficult phases in Indonesia’s economic history when pressure on the rupiah became an entry point to a larger crisis.
Although the current situation differs from 1998, the rupiah’s weakening cannot be taken lightly. Past experiences show that exchange rate pressures can spill over to various aspects, from inflation, import burdens, debt costs, to market players’ confidence in the direction of national economic policy.
Therefore, the current rupiah weakening cannot be read merely as daily volatility in the financial markets.