The Indonesian rupiah weakened sharply at the opening of Monday’s trading session, dropping by 33 points or 0.20 percent to Rp16,634 per US dollar (22/9).

After the market opened, the currency hovered at around Rp16,615 per USD, continuing a three-day downward trend.

This latest decline marks the third straight day of rupiah depreciation, reflecting growing concerns from both domestic and international developments that are rattling investor confidence.

Minister’s Statements Spark Market Confusion

Currency and commodity market analyst Ibrahim Assuaibi pointed to recent public remarks made by Finance Minister Purbaya Yudhi Sadewa as a primary driver of the decline.

According to Ibrahim, the minister’s statements were politically charged and lacked the professionalism expected from a top economic official.

"The main reason is the statements and testimonies given by Finance Minister Purbaya, which do not reflect the stance of a Finance Minister," said Ibrahim in his official commentary on Monday (22/9).

He added, "Everything sounds political, downplaying what was previously done by former Finance Minister Sri Mulyani."

Geopolitical Tensions and Policy Shifts Add Pressure

Beyond domestic sentiment, Ibrahim cited a number of external pressures influencing the currency’s performance.

One of them is the growing uncertainty surrounding the proposed shift in the Free Nutritious Meal (MBG) program into direct cash assistance, following food poisoning incidents reported in several areas.

Additionally, the ongoing war between Russia and Ukraine is fueling global instability. Ibrahim warned that a direct conflict between Russia and NATO could be imminent, especially after Russian President Vladimir Putin declared his successor to be a war veteran.

The pending U.S. court ruling in Donald Trump's appeal against Tina Chok is also seen as a contributing factor to market unease.

Ibrahim believes the rupiah could remain under pressure in the near term.

"Don’t be surprised if Sri Mulyani’s forecast in the 2025 state budget, that the rupiah could reach Rp16,900, comes true," he said.

PHOTO: PEXELS

This article was created with AI assistance.