Rupiah Falls to 18,239 per Dollar; Fuel Subsidies Safe
The government is using a global oil assumption of US$92-93 a barrel; the state budget can still absorb up to US$100.
Economic Affairs Minister Airlangga Hartarto said fuel subsidies remain safe through the end of December 2026 even as the rupiah weakened to 18,239 per U.S. dollar at Thursday’s close. He said fiscal room is still sufficient as long as global oil prices stay in the US$92-93 per barrel range and the exchange rate holds at current levels.
The government had previously kept subsidized fuel prices unchanged through Dec. 31, 2026. In its calculations, the 2026 state budget can still absorb an average oil price increase of up to US$100 per barrel. But the initial 2026 budget assumptions were lower, with Indonesian Crude Price set at US$70 per barrel and the exchange rate at 16,500 per U.S. dollar.
Pressure on the rupiah is coming from global and domestic sentiment. Bank Indonesia noted that expectations of higher Federal Reserve interest rates have also lifted the U.S. dollar index, while markets are watching political dynamics and foreign-exchange demand toward year-end.