Ria Fortuna Wijaya, Jakarta – The rupiah's weakness against not only the US dollar but also regional currencies reflects declining investor confidence in Indonesia, according to economist Lili Yan Ing, who warned that the exchange rate serves as a barometer of market trust.
The rupiah closed 129 points higher against the US dollar at Rp 18,058 on Tuesday, after briefly strengthening by as much as 150 points from its previous close of Rp 18,187. The rebound was also reflected against regional currencies, with the Singapore dollar, Malaysian ringgit, Thai baht, and South Korean won weakening 0.64%, 0.39%, 0.69%, and 0.45%, respectively, against the rupiah, according to Bloomberg data.
Lili said the rupiah's depreciation should not be viewed solely against the US dollar, but also in comparison with other major Asian currencies.
"The exchange rate is about confidence. Investors and businesses are no longer putting their trust in the Indonesian rupiah and are choosing other currencies and investment destinations instead," said the International Economic Association Secretary General Lili Yan Ing on Tuesday at Jakarta Investment Festival 2026.
She described the rupiah's weakness as an "alarming crash" and reiterated her long-standing view that the Rp 17,000-per-dollar level remains an important benchmark for assessing market confidence.
"Since last year, I have warned that our benchmark is Rp 17,000. Why Rp 17,000? Because during the Asian financial crisis, the rupiah reached around Rp 16,800 per dollar. Many people, including those in government, argue that it is not a peer-to-peer comparison. But in my view, that was the level of market confidence when Indonesia was facing its worst conditions," she said.
Lili argued that comparisons should focus on relative performance rather than nominal exchange-rate levels. During the 1997-1998 Asian financial crisis, she noted, countries such as South Korea, Thailand, Indonesia, Malaysia, and the Philippines were among the hardest hit.
Today, however, the rupiah has weakened not only against the US dollar but also against several regional currencies, including the South Korean won, Singapore dollar, Thai baht, and Malaysian ringgit.
"If we create an index, the rupiah has also declined relative to the Korean won, the Singapore dollar, the Thai baht, and Malaysia's ringgit. Why? As simple as that: confidence," she said.
Lili said that exchange rates ultimately reflect how investors and businesses perceive a country's economic prospects relative to its peers.
"That means investors and businesses are choosing other currencies and other investment destinations instead of Indonesia. That's why the exchange rate is a measure of confidence, and we must look at it relative to other countries," she said.