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View all search resultsDon’t let things slip now
As a battered rupiah, soaring oil prices, and global turmoil test the country's new economic chiefs, their trial by fire will determine whether technocratic discipline can hold against mounting political pressure.
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A visitor takes a photo of a screen displaying the movement of the Indonesia Stock Exchange (IDX) Composite index in Jakarta on Aug. 14, 2026. (Antara/Putra M. Akba)
I
t has been a trial by fire for Suahasil Nazara and Destry Damayanti. Just weeks after taking the reins at the Finance Ministry and Bank Indonesia (BI), respectively, the two former deputies find themselves confronting a vexing sense of déjà vu.
The familiar anxieties about financial stability that hung over the economy like the sword of Damocles throughout the spring and summer have returned, with the rupiah slipping back below the psychological threshold of 18,000 per United States dollar and oil climbing above US$100 per barrel.
This comes as mounting global financing costs raise tough questions for the state budget. Unsurprisingly, the stock market has taken a bruising as well, with the IDX Composite index down from more than 6,600 points around a month ago to just over 6,000 on Thursday.
Local equities had been off to a strong start in the second half of the year, after a dismal performance in the months before, while foreign capital was gradually flowing back into Indonesian stocks and bonds.
But the past few weeks serve as a grim reminder that we are not out of the doldrums and that Indonesia, like most emerging economies, remains largely at the mercy of global markets.
The realization that peace in the Middle East remains elusive as neither side in the US-Israeli war on Iran is willing to back off from its demands has driven up energy prices across the world and prompted several central banks to contain inflation with interest rate hikes.
BI, however, in its first board meeting under Destry as governor, kept its benchmark rate unchanged last week even after the US Federal Reserve had increased its Federal Funds Rate (FFR) the week before.
