The weakening of the Indonesian rupiah has sparked growing concern across Indonesia after the currency plunged to a record low of around 17,600 rupiah against the US dollar last week.
The sharp decline has broken what analysts described as the “psychological barrier” of 17,500 rupiah and surpassed the 16,800 level seen during the height of the 1998 Asian financial crisis.
The currency slump has dominated headlines and triggered heated public debate, with Bank Indonesia governor Perry Warjiyo facing criticism during a parliamentary hearing on May 18.
One lawmaker, Primus Yustisio from the National Mandate Party, openly suggested the central bank chief should resign over the weakening currency.
“Perhaps it is time for you to resign. There is nothing wrong with that,” the MP said during the hearing.
Despite mounting concerns from lawmakers and the public, President Prabowo Subianto and his administration insisted the country’s economic fundamentals remain strong.
Speaking at an event in Nganjuk, East Java, Prabowo downplayed fears surrounding the rupiah’s decline, saying ordinary villagers do not depend on US dollars in daily life.
“Some people keep saying Indonesia will collapse because of the rupiah and the dollar. But people in villages do not use dollars. Our food and energy supplies are secure,” he said.
However, the remarks quickly sparked backlash online, with Indonesian social media flooded by memes and satirical videos mocking the president’s comments.
One viral video by content creator Nuzulia Rahma sarcastically joked that villagers still travelled using horses and had to hunt for food, drawing millions of views online.
Another parody video showed rolled-up rupiah notes supporting a water gallon while claiming “the rupiah is strong”.
Finance Minister Purbaya Yudhi Sadewa later attempted to soften Prabowo’s remarks, saying the president was simply trying to cheer up rural communities.
He maintained that Indonesia’s fiscal health and economic fundamentals remained stable despite currency pressures.
Meanwhile, Perry Warjiyo also expressed confidence that the rupiah would recover in the coming months, noting that the currency historically faces seasonal pressure between April and June before strengthening later in the year.
Economists, however, warned that the weakening currency could eventually increase living costs, especially for lower-income communities.
Executive director of think tank CELIOS, Bhima Yudhistira, said imported components used in food production, fertilisers, pesticides and packaging materials could drive up prices even in rural areas.
Some Indonesians have already begun noticing the impact, with residents reporting smaller portions of staple foods such as tofu and tempeh despite unchanged prices.
At the same time, the weaker rupiah has boosted tourism, particularly from Singapore.
Data from Indonesia’s Tourism Ministry showed foreign tourist arrivals rose 8.6 per cent in the first quarter of 2026 compared to the same period last year, while tourist arrivals from Singapore increased by 10.4 per cent.
Many Singaporean visitors have flocked to Batam, attracted by the favourable exchange rate, which recently saw the rupiah fall to around 13,700 against the Singapore dollar.
Analysts said the currency crisis highlights broader concerns over investor confidence, government spending and Indonesia’s long-term economic stability.
