Indonesia’s Finance Minister, Purbaya Yudhi Sadewa, has labeled the current weakening of the rupiah as “unwarranted.” As of the close of trading on Wednesday, May 27, 2026, the Indonesian currency had breached the 17,800 mark against the US dollar. This significant movement has prompted questions regarding the underlying economic conditions.
Sadewa expressed surprise at the depreciation of the ‘Garuda’ currency, especially given the nation’s robust economic fundamentals. “It truly doesn’t make sense. Currency weakening typically occurs when there’s a disruption to economic fundamentals,” he remarked after attending Eid al-Adha prayers at the Directorate General of Taxes headquarters in Jakarta on Wednesday, May 27, 2026.
Despite this unusual trend, Sadewa remains unconcerned. He affirmed that the government would not need to revise its 2026 State Budget (APBN) assumptions, even with the rupiah now exceeding 17,800 per US dollar. The impact of the rupiah’s depreciation, he explained, had already been factored in when global oil prices surged to US$100 per barrel due to heightened escalation of the conflict between the United States and Iran.
The sharp decline in the rupiah’s exchange rate had also momentarily weakened the value of government bonds. However, the Finance Minister asserted that yields on State Securities (SBN) have now stabilized following interventions by the Ministry of Finance. Sadewa expressed confidence that these strategic efforts have successfully attracted foreign capital into Indonesia’s financial markets.
Under the 2026 APBN macro assumptions, the rupiah was projected to trade at 16,500 per US dollar, with an upper limit of 16,800. The Indonesian currency currently stands significantly further from these initial targets, highlighting the challenges in maintaining stability.
Earlier, Ibrahim Assuabi, Director of PT Traze Andalan Futures, had predicted that the rupiah’s weakening would persist throughout this week’s long holiday period. He attributed this to sustained significant external pressures impacting the currency’s performance.
The Eid al-Adha celebration, as expected, led to an extended domestic market holiday over the weekend. Assuabi explained, “Bank Indonesia cannot intervene in the domestic market, bonds, and government debt securities, restricting its operations to the international market. This situation will inevitably lead to further rupiah depreciation,” he stated on Tuesday, May 26, 2026.
According to Ibrahim, the rupiah’s sharp decline this afternoon is still heavily influenced by ongoing volatility in the Middle East and rising global oil prices. He forecasted that the Indonesian currency could reach a new low of 18,000 per US dollar this week, signaling continued challenges for the national economy.
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Summary
Indonesia’s Finance Minister, Purbaya Yudhi Sadewa, expressed surprise at the rupiah’s depreciation beyond 17,800 against the US dollar, deeming it “unwarranted” given strong economic fundamentals. He stated that the government would not need to revise the 2026 State Budget assumptions, as the impact of the rupiah’s weakening, particularly in relation to global oil prices, had already been accounted for.
Despite initial volatility in government bonds due to the rupiah’s decline, the Finance Minister affirmed that yields have stabilized following Ministry of Finance interventions, which he believes have successfully attracted foreign capital. Earlier predictions suggested continued rupiah weakening due to external pressures and limited central bank intervention during market holidays, with forecasts indicating a potential drop to 18,000 per US dollar.