Jakarta. Finance Minister Purbaya Yudhi Sadewa dismissed claims that the rupiah's slide toward Rp 18,000 per US dollar reflects deteriorating government finances, arguing that fiscal indicators have continued to improve despite mounting pressure on the currency.

Bloomberg data showed the rupiah opened 37 points, or 0.21%, lower at Rp 18,003 per US dollar on Thursday morning, breaching the psychological Rp 18,000 level even as the US Dollar Index eased 0.08% to 99.445.

Purbaya said concerns that the government has pursued reckless fiscal policies are not supported by the latest state budget data. Instead, he pointed to a narrowing budget deficit, a return to primary surplus, and strong tax revenue growth as evidence that Indonesia's fiscal position remains sound.

"There's no truth to that. People immediately blame fiscal policy. Many say it's because the government's fiscal policy is being mismanaged," Purbaya told reporters.

The minister added that the 2026 state budget posted stronger results through May compared with April. The budget deficit narrowed to around 0.7% of GDP, while the primary balance returned to surplus territory. Tax revenue also grew more than 22% year-on-year during the period.

"If I may give you a preview, the deficit is only around 0.7% after five months. If my calculation is correct, that translates to roughly 1.7%-1.8% of GDP. That means our budget remains very safe," he said.

Purbaya argued that the rupiah's recent weakness has been driven more by market sentiment and speculation than by concerns over fiscal sustainability.

He also denied market rumors suggesting he had instructed banks to conduct stress tests in the event the rupiah breaches Rp 18,000 per dollar. "That information is not true," he said.

The rupiah closed 0.71% weaker at Rp 17,966 per US dollar on Wednesday, extending losses amid heightened volatility in global financial markets. Despite the decline, Purbaya maintained that Indonesia's economic fundamentals remain strong enough to support long-term currency stability.

"So if there are claims that government policies are misguided or that fiscal management is reckless, that's simply not the case. Our fiscal position is improving. You'll see it in the upcoming APBN KiTa (monthly state budget) report," Purbaya said.

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