The rupiah exchange rate weakened toward Rp 17,000 per US dollar on January 21, 2026, driven by global and domestic pressures. Economist Josua Pardede stressed the need for fiscal policy certainty to restore market confidence. Meanwhile, the IHSG opened lower amid rising external risks.
On Wednesday, January 21, 2026, the rupiah exchange rate against the US dollar hovered around Rp 16,900, nearly touching Rp 17,000, according to spot market data at 09:51 WIB at Rp 16,959, down 3 points from Rp 16,956. Josua Pardede, Head Economist at Permata Bank, stated that pressures are coming simultaneously from global factors like escalating geopolitical tensions and US central bank policy uncertainty, as well as domestic concerns over widening budget deficits.
"The most effective mitigation from the government's side is essentially to restore confidence through certainty of policy direction and strengthening foreign exchange sources," Josua said in Jakarta. He recommended locking in a credible fiscal narrative, including deficit targets, financing sources, and spending priorities, along with measured debt management coordinated with Bank Indonesia (BI) to maintain rupiah liquidity.
Additionally, export forex policies should encourage repatriation without burdening exporters, while non-productive forex demand is curbed through energy and food import substitution and reasonable hedging. The IMF revised Indonesia's economic growth projection to 5.1 percent for 2026-2027, higher than previous estimates, though global growth rises to 3.3 percent.
In the stock market, the IHSG opened down 40.27 points or 0.44 percent to 9,094.43, while the LQ45 fell 0.95 percent to 875.94. Markets are watching the BI Rate decision, projected to hold at 4.75 percent, and US President Donald Trump's rhetoric on tariffs against NATO countries related to Greenland, which triggered declines in US and European markets on January 20, with the Dow Jones down 0.76 percent and S&P 500 2.06 percent.
