The rupiah exchange rate has experienced greater pressure than regional currencies amid relatively uniform global dynamics. The strengthening of the US dollar and increasing geopolitical uncertainty have indeed driven capital outflows from emerging markets. However, the rupiah’s weakening, which far exceeds the regional average, indicates that domestic factors are also playing an important role.
As of April 23, 2026, the US dollar index (DXY) has strengthened by 0.32% year-to-date (YTD). Asian currencies depreciated an average of around 0.31% YTD, relatively in line with global trends. In contrast, the rupiah weakened by 3.59% YTD – indicating country-specific risk.
This pressure on the rupiah is also reflected in domestic financial markets. The yield on 10-year government bonds rose 0.57% YTD, higher than the Asian average (0.26%). In the stock market, the IHSG (Jakarta Composite Index) has corrected by around 14% YTD, the worst in the region, while Asian stock markets have risen by around 5.33%.
These developments confirm that pressure on the rupiah cannot be solely explained by global factors. Indonesia even has a relative cushion as a commodity exporter and producer of some of its energy needs. If performance is worse than other countries, then domestic issues need to be addressed.
Responding to this situation, the Indonesian Business Council (IBC) emphasizes the importance of a credible policy response. Denni Purbasari Chief Economist of IBC, stated, “In the long term, exchange rate stability stems from strong national economic competitiveness relative to other countries. However, in the short term, exchange rate movements are heavily determined by the direction of macro policy and how that policy is communicated to the market.”
Going forward, strengthening market confidence will be key. Efforts to respond to various notes from MSCI, Fitch Ratings, Moody’s, and S&P Global Ratings regarding policy certainty, governance, and structural reform can be an initial step toward changing perceptions of risk in the Indonesian economy.