The Indonesian government has declared its commitment to maintaining the existing rupiah exchange rate assumption against the US dollar within the macroeconomic framework for the 2026 State Budget (APBN). This strategic decision underscores a measured approach to fiscal planning amidst global economic dynamics.
Finance Minister Purbaya Yudhi Sadewa affirmed that the current fluctuations in the rupiah-dollar exchange rate are well within the scope of previously anticipated scenarios. This perspective suggests that the government had already factored in potential currency movements when formulating its financial outlook.
Purbaya further clarified that the recent depreciation of the rupiah against the greenback has not yet reached a point compelling the government to revise its intricate fiscal calculations. He emphasized that both potential exchange rate shifts and external economic risks were robustly integrated into the government’s initial economic simulations from the outset.
Illustrating the thoroughness of their planning, he revealed that the government had also accounted for a scenario involving elevated global oil prices, projecting an average of USD 100 per barrel throughout the year. Significantly, the anticipated movements of the rupiah were consistently incorporated into these comprehensive simulations, demonstrating a holistic approach to risk assessment.
“When we conducted our calculations and simulations for world oil prices averaging USD 100 per barrel throughout the year, we already embedded that into our rupiah assumptions,” Purbaya stated during the APBN KiTa press conference on Tuesday, May 19, highlighting the proactive nature of their fiscal strategy.
Consequently, the government has resolutely decided against altering its previously established assumptions. The precautionary cost-saving measures already implemented are deemed entirely sufficient to navigate the prevailing market conditions with confidence and maintain currency stability.
He reiterated, “Therefore, I don’t need to change anything; we have already executed savings that we believe are adequate for the current situation, including the rupiah’s anticipated shifts which were accounted for during those extensive simulations.”
Despite the immediate pressures, Purbaya expressed a strong conviction that the rupiah’s current weakness will be transient. He noted an encouraging resurgence of positive sentiment across financial markets, particularly evident in the domestic bond market, which is once again attracting substantial investor inflows.
“But remember, the rupiah will not remain at this level for too long. We have already observed an improvement in sentiment in the bond market; funds are starting to flow into our market, and I believe more will enter in the future, ultimately leading to a strengthening of the rupiah,” he affirmed confidently, projecting a positive economic outlook.
For 2026, the fundamental assumption for the rupiah exchange rate has been set within a range of Rp 16,200 to Rp 16,900 per US dollar, with a baseline or midpoint target of Rp 16,500 per US dollar, guiding future fiscal policy.
On Tuesday, May 19, the rupiah concluded trading weaker, dropping by 38 points or 0.22 percent, to close at Rp 17,706 per US dollar, reflecting the immediate market performance.
Summary
The Indonesian government is committed to maintaining its existing rupiah exchange rate assumption for the 2026 State Budget, with Finance Minister Purbaya Yudhi Sadewa affirming that current fluctuations were well within anticipated scenarios. He emphasized that comprehensive initial simulations already incorporated potential currency shifts, external economic risks, and even a scenario of elevated global oil prices, thus negating the need to revise fiscal calculations. Precautionary cost-saving measures already implemented are considered entirely adequate for the prevailing market conditions.
Purbaya expressed strong conviction that the rupiah’s current weakness will be transient, projecting a strengthening trend fueled by improving sentiment and investor inflows in the bond market. For 2026, the fundamental assumption for the rupiah exchange rate is set within a range of Rp 16,200 to Rp 16,900 per US dollar, with a baseline target of Rp 16,500. This outlook guides future fiscal policy despite the rupiah closing weaker at Rp 17,706 per US dollar on May 19.