President Prabowo Subianto has addressed recent concerns regarding the depreciation of the Indonesian rupiah against the United States dollar, urging the public to remain calm. According to the President, the currency’s fluctuation should not be a cause for alarm among the general population.
“As long as Purbaya (Finance Minister Purbaya Yudhi Sadewa) can smile, stay calm and do not worry. No matter how many thousands (the exchange rate) hits, you in the villages do not use dollars,” said Prabowo during the inauguration of 1,061 Merah Putih Village Cooperatives in Nganjuk, East Java, on Saturday (May 16).
The President suggested that those feeling anxious or burdened by the fluctuating exchange rate are likely individuals who frequently travel abroad. He expressed firm confidence in the resilience and fundamental strength of the Indonesian economy. “Whatever people say, Indonesia is strong. Trust in our strength, trust in our people,” he added.
Recent data from Bloomberg indicates that the rupiah reached 17,600 per US dollar on Friday (May 15), marking its weakest level in history. This follows the currency breaking the 17,500 threshold for the first time during trading on Tuesday morning (May 12).
Bank Indonesia (BI) maintains that the rupiah’s decline is primarily driven by global market dynamics. Factors such as the conflict between Iran, the US, and Israel—which has triggered a spike in global oil prices—alongside rising US interest rates, have put pressure on the rupiah and other emerging market currencies.
Ramdan Denny Prakoso, Executive Director of the Communications Department at BI, noted that this pressure is a widespread phenomenon affecting many developing nations. Since the end of February 2026, global oil prices have surged by more than 40%. Furthermore, the yield on the 10-year US Treasury note, which has neared 4.5%, has significantly bolstered the strength of the US dollar against global currencies.
“If we look at the current 10-year US Treasury, it is approaching 4.5%. At the end of February, it was still around 4%,” Denny stated at the BI Office in Central Jakarta on Wednesday (May 13). He highlighted that other currencies, including the Philippine peso, Thai baht, Indian rupee, South African rand, Chilean peso, and South Korean won, have faced similar downward pressure.
Beyond global trends, domestic factors are also contributing to the rupiah’s movement. Bank Indonesia has observed an increased demand for the US dollar, largely driven by seasonal dividend repatriation, foreign debt repayments, and financial requirements for the Hajj pilgrimage.
Despite these challenges, Bank Indonesia remains optimistic about its ability to maintain the stability of the rupiah. The central bank continues to intervene actively in both domestic and international markets to monitor and manage currency movements. “Once the Jakarta market closes, we stand by in the European market. We then stand by in the American market to keep watch on how the rupiah exchange rate moves,” Denny concluded.
Summary
President Prabowo Subianto has urged the public to remain calm following the Indonesian rupiah’s recent decline, which reached a historic low of 17,600 per US dollar. He emphasized that the fluctuation is less relevant to rural residents who do not rely on foreign currency for their daily needs. The President maintained strong confidence in the underlying resilience and fundamental strength of the Indonesian economy.
Bank Indonesia attributes the currency’s depreciation to global factors, including rising oil prices and increased US interest rates, which have affected many emerging markets. Additionally, local demand for dollars driven by debt repayments and seasonal financial requirements has added pressure. Despite these challenges, the central bank continues to actively monitor and intervene in global markets to stabilize the rupiah.
