Indonesian officials have moved to reassure markets that the country’s economic fundamentals remain sound after the rupiah sank to a record low, but President Prabowo Subianto’s attempts to play down the currency’s slide has attracted criticism from economists and social media users alike.
The rupiah fell to 17,720 per US dollar on Tuesday, cementing its status as one of Asia’s worst-performing currencies this year.
Indonesia’s main stock index, the Jakarta Composite Index (JCI), tumbled 3.46 per cent on the same day, deepening a rout partly triggered by the removal of several Indonesian companies from major global indices including MSCI and FTSE Russell.
Villagers don’t use dollars
Speaking to villagers in East Java on Saturday, Prabowo pushed back against what he called exaggerated warnings about the country’s economy, arguing that ordinary rural Indonesians were not directly exposed to US dollar transactions.
Advertisement
“There are people who are always saying … Indonesia will collapse any minute, it will be chaos. The rupiah is like this, the dollar is like this. Villagers don’t use dollars,” he said. “The ones who are having a headache are those who like to travel abroad.”
Prabowo declared that Indonesia’s “economy and fundamentals are strong”, adding there was nothing to worry about “as long as [Finance Minister] Purbaya Yudhi Sadewa is smiling”.
On Monday, Purbaya sought to reassure markets that Indonesia would not suffer a repeat of the fallout from the 1997 Asian financial crisis despite its weakening currency.