Jakarta. Indonesia expects the rupiah to strengthen to between Rp 16,800 and Rp 17,500 per US dollar in 2027, from levels currently above Rp 18,000, Finance Minister Purbaya Yudhi Sadewa said on Tuesday.

Speaking during a plenary session at the House of Representatives, Purbaya said the government would continue to strengthen coordination between fiscal and monetary authorities to maintain exchange-rate stability while supporting economic growth.

“Amid continued global uncertainty, coordination between fiscal and monetary policy will be further strengthened to ensure that both policies work in harmony without creating crowding-out effects, so that economic and financial-market stability can be maintained to support growth,” Purbaya told lawmakers.

According to the minister, exchange-rate stability remains critical for maintaining investor confidence, controlling inflation, and managing the government's financing costs. Excessive volatility in the rupiah can affect import prices, subsidy requirements, and overall state spending, he said.

“In line with those objectives, the exchange rate in 2027 is projected to be in the range of Rp 16,800 to Rp 17,500 per US dollar,” Purbaya added.

The forecast is part of the government's macroeconomic assumptions underpinning the preparation of the 2027 state budget.

The projection comes as the rupiah remains under pressure from a combination of global and domestic factors, having weakened beyond Rp 18,000 per dollar in recent months.

Purbaya has faced criticism for repeatedly stating that exchange-rate management falls primarily under the authority of Bank Indonesia rather than the Finance Ministry.

At the same time, some economists have argued that the rupiah's prolonged depreciation reflects not only external pressures but also concerns over fiscal policy. Critics contend that rising government spending on flagship programs -- including free nutritious meals, energy subsidies, the establishment of tens of thousands of rural cooperatives, and expanded social assistance programs -- has raised questions about fiscal sustainability and policy priorities.

The government, however, maintains that its fiscal strategy is designed to support economic growth, protect household purchasing power, and reduce poverty while keeping the budget deficit within manageable limits.