Indonesia Rupiah Hits New Record Low Despite Central Bank Intervention: President Prabowo Downplays Impact

Kuala Lumpur – The Indonesian rupiah plunged to a fresh all-time low on Monday, May 18, 2026, despite aggressive currency interventions by the central bank, as investor concerns continue to weigh on Southeast Asia’s largest economy.

The rupiah weakened as much as 1.2% to a record low of 17,670 against the US dollar before trimming some losses later in the session. The slide occurred alongside a nearly 2% drop in Jakarta’s main stock index, which resumed trading after a holiday weekend.

Bank Indonesia Governor Perry Warjiyo told parliament that the central bank has “increased the dosage of our currency interventions” and is prepared to take further measures ahead of its monthly policy meeting later this week.

“This is not business as usual. We are going all out,” Warjiyo said. He noted that foreign exchange reserves have declined by around $10 billion this year but remain “more than adequate” to support stability. The governor expects pressure on the rupiah to ease from July to August due to seasonal reductions in dollar demand.

Despite the currency’s sharp fall, President Prabowo Subianto sought to reassure the public during a visit to East Java on Saturday.

“However many thousands of rupiah the exchange rate to the dollar is, you folks in villages do not use the dollar anyway,” Prabowo said at the launch of a village cooperative programme. He emphasised that Indonesia’s economic fundamentals remain strong, with sufficient food and energy supplies.

“Many countries are panicking but Indonesia is still okay,” he added, while criticising those who interpret the rupiah’s decline as a sign of economic weakness.

The government has also increased its fuel subsidy budget to protect citizens from the impact of rising global oil prices.

Background Pressures

Analysts note that the rupiah and Indonesian stocks were already under pressure even before recent regional tensions, due to investor worries over market transparency, central bank independence, and the government’s ambitious spending plans. The recent removal of more than a dozen Indonesian companies from MSCI indexes added to the sell-off.

This latest record low highlights ongoing challenges for the rupiah, even as authorities insist the economy’s core strengths remain intact.