Business · Markets · 2 hrs ago

Economists Say Rupiah at 21,000 Would Be an Extreme-Risk Scenario

Economists Say Rupiah at 21,000 Would Be an Extreme-Risk Scenario

Hashim Djojohadikusumo warned the rupiah could weaken to 21,000–22,000 per US dollar if foreign investors leave Indonesia’s stock market.

He linked that risk to a possible downgrade by global index provider MSCI and concerns about manipulated stock prices.

The rupiah stood at 18,148 per dollar on November 3, so reaching Hashim’s range would require a further fall of about 16% to 21%.

Economists said that level is an extreme-risk scenario, not the main forecast, and would likely require wider financial pressures than a stock-market downgrade alone.

If MSCI downgrades Indonesia, one economist estimated that passive investment funds could withdraw US$3 billion to US$6 billion.

A much deeper fall would likely need several shocks at once, including foreign withdrawals from government bonds and a stronger US dollar globally.

Indonesia also has foreign-exchange reserves of US$146.3 billion, while MSCI’s final decision on reclassifying the market is scheduled for June 2027.

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What people are saying

Rizal TaufikurahmanINDEF macroeconomics and finance center head
The calculation requires assumptions about capital outflows, foreign-exchange needs, and BI’s ability to stabilize the market.
via CNN Indonesia
Josua PardedeBank Permata chief economist
A much deeper weakening of the rupiah would require a shock far broader than simply foreign funds leaving the stock market.
via CNN Indonesia
Hashim DjojohadikusumoKadin Indonesia advisory board chairman
This is a very, very serious problem because if foreign investment leaves our stock market, the rupiah could weaken further.
via CNN Indonesia