Jakarta. Bank Indonesia has pledged to maintain rupiah stability after the currency hit a record low, as a government official warned it could weaken further to Rp22,000 per US dollar amid concerns over market governance and investor confidence.

The rupiah closed at Rp18,184 per dollar on Wednesday, weakening 0.15% from the previous session. The central bank’s Jakarta Interbank Spot Dollar Rate, or JISDOR, stood at Rp18,183, also a record low.

Bank Indonesia Deputy Governor Destry Damayanti said Thursday that the central bank was monitoring currency movements and would remain focused on maintaining stability to support economic growth and job creation.

“Stability is what we must maintain to create a conducive economic climate, so the real economy can grow and create jobs,” Destry said after attending a meeting of the Indonesian Chamber of Commerce and Industry in Jakarta.

She said the rupiah’s movement depended on supply and demand as well as market perceptions, while Indonesia’s economic conditions remained relatively sound compared with neighboring countries.

Destry also pointed to signs of a global economic recovery and the US Federal Reserve’s decision not to raise its benchmark interest rate as factors supporting Indonesia’s economy. However, she acknowledged that external developments remained largely beyond the central bank’s control.

Bank Indonesia has pledged to remain active in financial markets to stabilize the currency as uncertainty over the Middle East conflict keeps oil prices above $115 a barrel and raises concerns about Indonesia’s fiscal outlook. Expectations of higher US interest rates have also strengthened the dollar and encouraged capital outflows from emerging markets.

Market Governance Raises Currency Risks

Hashim Djojohadikusumo, a special presidential envoy for climate and energy who is also President Prabowo Subianto's younger brother, warned that weak governance and artificial share-price inflation could undermine investor confidence and put further pressure on the rupiah.

Hashim said the currency could weaken to between Rp20,000 and Rp21,000 per dollar, with some estimates reaching Rp22,000, if authorities failed to address unhealthy trading practices.

Such a depreciation would increase the cost of servicing Indonesia’s foreign debt and could threaten broader economic stability, he said.

Hashim urged investors to follow transparent governance standards and comply with market regulations, warning that prolonged violations could damage the capital market.

His comments come after MSCI on Oct. 15 launched a consultation on a proposal to downgrade Indonesia from emerging-market status to a standalone market. Investors can submit feedback through April 30, 2027, with a final decision expected by June 30, 2027.

Hashim said concerns over stock manipulation, particularly in shares with limited public ownership and unusually high valuations, were among the issues attracting scrutiny from MSCI and foreign investors.

He warned that foreign investment withdrawals from Indonesia’s stock market could further weaken the rupiah and spill over into the broader economy.

Bank Indonesia has reiterated its commitment to currency stability, while the government faces pressure to strengthen market governance and sustain investor confidence.

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