TEMPO.CO, Jakarta – Indonesia’s rupiah has weakened past the psychological level of Rp18,000 per US dollar, prompting calls for broader policy coordination beyond monetary tightening. On Friday morning, June 5, 2026, the rupiah traded at Rp18,031 per US dollar.
Trimegah Sekuritas chief economist Fakhrul Fulvian said Bank Indonesia’s 50-basis-point interest rate hike alone is not sufficient to stabilize the currency. According to him, rupiah stability requires a combination of fiscal discipline, healthy financial markets, clear external sector strategy, and stronger policy credibility.
“Strengthening the rupiah requires a combination of fiscal policy, a healthy financial market, a clear balance of payments strategy, and strong investor confidence,” Fakhrul said in a written statement on Friday.
He outlined five key policy steps:
1. Fiscal normalization
Fakhrul said the government needs to gradually normalize fiscal policy so that economic stabilization does not rely too heavily on Bank Indonesia or exchange rate adjustments. In this context, he suggested that the government evaluate several priority spending programs, including the Free Nutritious Meals (MBG) program.
2. Normalize the bond yield curve
He noted that Indonesia’s government bond yield curve is currently too flat and does not yet reflect a normal risk structure for an emerging market economy. This, he said, raises questions among global investors about market functioning and how asset prices are formed in Indonesia.
“For global investors, this creates questions about the function of the market and the process of price discovery,” Fakhrul said.
3. Reduce reliance on sterilization instruments
Fakhrul said Bank Indonesia’s sterilization tools, such as Bank Indonesia Rupiah Securities (SRBI), have been effective in managing liquidity during periods of volatility. However, he warned that long-term stability requires allowing capital to flow more naturally into government bonds and productive sectors of the economy.
4. Provide clarity on balance of payments strategy
According to Fakhrul, investors are closely monitoring Indonesia’s external sector direction. He stressed the importance of a clearer and more consistent balance of payments strategy, including greater clarity on the implementation of PT Danantara Sumberdaya Indonesia.
5. Strengthen policy communication and credibility
Finally, Fakhrul emphasized that consistent and coordinated communication is critical to restoring market confidence. He said investors are able to accept difficult or unpopular policies, but not uncertainty.
“Markets can accept policies that are difficult and unpopular, but they find uncertainty very hard to accept,” he said.
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