Coordinating Minister for Economic Affairs, Airlangga Hartarto, asserts that the current depreciation of the rupiah stands in stark contrast to the economic climate of two decades prior. He highlighted that from 2004 to 2014, the Indonesian rupiah experienced a substantial 40 percent depreciation over a decade. This period also saw inflation soar to 17 percent in 2005, largely driven by a dramatic surge in crude oil prices, which peaked at US$140 per barrel.
In contrast, Airlangga pointed out that the 2014-2024 period witnessed a more moderate rupiah depreciation of 30.6 percent, accompanied by a significantly lower inflation rate of just 3 percent. “This demonstrates a distinct qualitative difference in our economic management over the past two decades,” Airlangga remarked at the National Conference on Regional Economic Development at Balai Kartini, Jakarta, on Monday, May 25, 2026. He further emphasized, “As of today, we have successfully maintained inflation at a manageable 2.4 percent, with rupiah depreciation at 5 percent.”
Airlangga urged a broader perspective when assessing the rupiah’s current weakening, stressing that it should not be viewed in isolation. He confidently stated that Indonesia’s economic fundamentals remain robust, with both the banking sector and corporate conditions exhibiting unwavering strength and stability.
Echoing this sentiment, Mukhamad Misbakhun, Chairman of Commission XI of the House of Representatives (DPR RI), weighed in on the issue. He asserted that the rupiah’s current weakening to Rp 17,600 per US dollar cannot be compared to the severe 1998 monetary crisis. During that turbulent period, he recalled, the rupiah’s exchange rate dramatically plunged, even surpassing Rp 17,800 per US dollar.
Misbakhun elaborated on the stark differences, highlighting that in 1998, the exchange rate depreciation was an astronomical hundreds of percent within a very short timeframe. “Crucially, the rupiah’s value at that time plummeted to those levels from an initial base of approximately Rp 2,000 per US dollar,” he explained. “In contrast, the rupiah’s current level of Rp 17,000 began its movement from around Rp 16,800, and this process has been characterized by managed volatility, not a freefall.”
This morning brought a positive turn for the rupiah, which strengthened by 21 points, or 0.12 percent, to reach Rp 17,696 per US dollar. This marks an improvement from its previous closing level of Rp 17,717 per US dollar. According to Lukman Leong, a currency analyst at Doo Financial Futures, this uptick in the rupiah’s value is largely fueled by renewed hopes for peace between the United States and Iran, a significant international development.
Domestically, market sentiment has shown signs of recovery since last Friday, evidenced by a positive close in the capital market. “However, the rupiah still faces lingering pressure following the release of current account balance data, which indicated a substantial deficit,” Lukman noted from Jakarta on Monday, May 25, 2026, as quoted by Antara.
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Summary
Coordinating Minister for Economic Affairs Airlangga Hartarto asserts that the current rupiah depreciation is significantly more stable compared to previous decades. Data shows that the currency’s decline from 2014 to 2024 was substantially lower than the 2004–2014 period, bolstered by maintained low inflation rates and resilient economic fundamentals. Officials emphasize that current market conditions cannot be compared to the 1998 monetary crisis, as the present volatility is managed rather than a freefall.
Recent market updates indicate a slight strengthening of the rupiah, driven by positive international developments regarding geopolitical tensions. Although the currency faces some pressure due to a current account deficit, domestic market sentiment remains resilient. Experts maintain that the nation’s banking and corporate sectors remain strong, providing a buffer against ongoing global economic challenges.