Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, addressed the depreciation of the Indonesian Rupiah against the US Dollar on Tuesday morning. The Rupiah was observed to weaken by 11 points, or 0.07 percent, reaching Rp 17,405 per US Dollar, down from its previous closing of Rp 17,394 per US Dollar.
According to Minister Hartarto, the weakening of local currencies against the US Dollar is a common phenomenon experienced by various countries, particularly during the Hajj pilgrimage season. He elaborated on this point at a press conference concerning the first-quarter 2026 economic growth, held at his office on Tuesday, May 5, 2026. “Regarding the Rupiah, many countries are indeed experiencing a weakening against the USD, and typically, during the Hajj pilgrimage, demand for the dollar increases,” he stated, highlighting the seasonal impact.
Furthermore, the Minister explained that the heightened demand for the dollar is also influenced by the second-quarter period, which often coincides with dividend payments, leading to a surge in foreign exchange requirements. The government, he assured, will continuously monitor these developments, including by benchmarking against conditions in other nations.
In response to these dynamics, Airlangga revealed that the government, in close collaboration with Bank Indonesia, has implemented several anticipatory measures. These include strengthening currency swap agreements with China and other key nations like Japan and South Korea. Additionally, the government is strategically diversifying its debt financing composition and issuing securities in non-US Dollar denominations, such as the Chinese Yuan and Japanese Yen, as a proactive step to mitigate pressure on the US Dollar.
Providing a broader perspective, Erwin Gunawan Hutapea, Head of Bank Indonesia’s (BI) Monetary and Asset Management Department, previously affirmed that the Rupiah’s exchange rate movements since the onset of the Middle East conflict have remained consistent with the trends observed in most other emerging market currencies. In a written statement issued on Tuesday, May 5, 2026, Erwin reiterated BI’s unwavering commitment: “Bank Indonesia will continue to maintain its presence in the market to ensure that market mechanisms function effectively.”
Erwin further elaborated on the prevalent pressures, noting that several emerging market currencies faced significant headwinds during this period. For instance, the Philippine Peso depreciated by 6.58 percent, the Thai Baht fell by 5.04 percent, and the Indian Rupee weakened by 4.32 percent. Similarly, the Chilean Peso saw a 4.24 percent decline, the Rupiah softened by 3.65 percent, and the Korean Won dipped by 2.29 percent. This comparative data underscores that the Rupiah’s performance is not an isolated incident but part of a wider regional and global trend.
To bolster exchange rate stability, Bank Indonesia is actively optimizing its interventions in the foreign exchange market. This involves strategic utilization of non-deliverable forward (NDF) transactions in offshore markets, spot transactions, and domestic non-deliverable forward (DNDF) transactions within the domestic market. Complementing these efforts, the central bank is also consistently acquiring government securities in the secondary market. These decisive and calibrated measures are being executed to safeguard the Rupiah’s exchange rate stability amidst persistent global pressures.
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Summary
The Indonesian Rupiah has weakened to Rp 17,405 per US Dollar, a decline attributed by Coordinating Minister Airlangga Hartarto to seasonal factors such as the Hajj pilgrimage and increased demand for foreign exchange during the dividend payment period. This trend is not unique to Indonesia, as many other emerging market currencies have experienced similar depreciation due to global economic pressures.
To stabilize the currency, the government and Bank Indonesia have implemented proactive measures, including strengthening currency swap agreements with China, Japan, and South Korea, while diversifying debt financing into non-USD denominations. Bank Indonesia continues to intervene in the market through spot and forward transactions to ensure market stability and manage the volatility caused by these ongoing global and regional challenges.