Indonesia Rupiah Risks Sliding to 21,000 per Dollar if Stock Manipulation Goes Unchecked, Hashim Djojohadikusumo Warns

JAKARTA, Investortrust.id — The Indonesian rupiah faces the risk of plunging to Rp 21,000 per U.S. dollar if foreign investor confidence continues to deteriorate and widespread market manipulation across the domestic equity exchange is left unaddressed, warned Hashim Djojohadikusumo, Chairman of the Advisory Board of the Indonesian Chamber of Commerce and Industry (Kadin).

Speaking at the opening of Kadin’s National Leadership Meeting (Rapimnas) at Hotel Borobudur in Jakarta on Thursday, Oct. 29, 2026, Hashim urged corporate leaders and policymakers to treat capital market integrity as a frontline macroeconomic security issue. The fallout from unchecked trading abuses, he stressed, could easily cascade beyond falling stock prices into intense currency depreciation, ballooning foreign-debt servicing burdens, and broader economic disruption.

"If foreign investment exits our stock exchange, the rupiah could weaken significantly," Hashim said. "By my calculations, it could reach Rp 20,000 to Rp 21,000. Some have even projected Rp 22,000."

While Hashim did not disclose his specific quantitative models or time horizons, the projections were presented as a high-stakes downside scenario should massive foreign institutional capital flight materialize.

Severe currency depreciation would drastically inflate the cost of servicing external corporate and sovereign debt. Companies generating revenue in local currency while carrying unhedged dollar-denominated liabilities face an immediate surge in repayment pressure.

Illustrating the strain, servicing a US$1 million obligation requires Rp 18 billion at an exchange rate of Rp 18,000 per dollar. If the currency falls to Rp 21,000, that exact debt demands Rp 21 billion—an additional Rp 3 billion, or 16.7% increase, in local funding. Beyond financial balance sheets, persistent exchange-rate pressures threaten to lift imported raw material costs, squeeze corporate operating margins, and stymie capital expenditure across Southeast Asia's largest economy.

"Our foreign debt payments will become far more expensive," Hashim said. "This could turn into a disaster and a catastrophe for the Indonesian economy."

MSCI Downgrade Looms Large

Hashim emphasized that President Prabowo Subianto has directly instructed him to work alongside Minister of Investment and Downstream Industry Rosan Roeslani and other senior cabinet members to counter the market turbulence. The primary goal is preventing index-linked selling from spiraling out of control.

"I have been asked by the President to assist Pak Rosan and our colleagues across government," Hashim noted.

The policy urgency arrives amid MSCI Inc.'s ongoing market consultation, launched on Oct. 15, 2026, which proposes reclassifying Indonesia from Emerging Market directly to Standalone Market status. The global index compiler cited persistent opacity in shareholding arrangements, suspected coordinated trading schemes, and a chronic absence of visible regulatory enforcement. The consultation remains open through April 30, 2027, ahead of a final determination scheduled by June 30, 2027.

Hashim cautioned that losing Emerging Market status would dry up international liquidity as global funds benchmarked against emerging-market indices are legally forced to dump local holdings.

"If we fail to mitigate the MSCI situation, funding sources for our capital market will dry up," he warned. "Many investors will be forced to pull their capital if we are downgraded to a standalone market."

A Call to End Pump-and-Dump Trading

Hashim directed sharp criticism at unethical market syndicates, pointing specifically to counters with extremely low public floats that trade at detached, sky-high price-to-earnings valuations.

"There are clear indications of unhealthy practices taking place in our stock exchange. I do not need to name names, but there are shares that are colloquially 'fried' (digoreng)," he said, referencing orchestrated pump-and-dump manipulation.

While thin liquidity and elevated multiples do not automatically constitute illegal activity, Hashim argued that coordinated price-rigging destroys price discovery and wipes out public trust. He appealed directly to members of Kadin to refrain from participating in such schemes, warning that regulatory authorities are prepared to take unsparing enforcement measures, pointing to aggressive crackdowns on market manipulators recently carried out in Turkey.

"I plead with our colleagues in Kadin: this is an exceptionally serious issue," he said. "Please stop these market manipulation games. I implore you, halt these practices immediately."

Protecting the market is also a consumer protection imperative, Hashim noted, pointing to Financial Services Authority (OJK) data showing that 32.7 million Indonesians now hold investment brokerage accounts. Sharp paper losses have stirred widespread dissatisfaction among retail and institutional investors alike—including Hashim himself.

"I also own shares in public companies, and I am not satisfied," he remarked. "The government must pay close attention to this matter."

Broadening the Fiscal Base

Despite his grave warnings on market governance, Hashim maintained that Indonesia’s broader economic trajectory remains fundamentally robust if structural domestic reforms are executed.

He argued that the nation's massive economic throughput is not yet properly captured in formal state revenue due to an extensive informal economy. Citing World Bank estimates, Hashim noted that unrecorded transactions account for roughly 35% to 40% of overall activity, primarily through cash-based micro-enterprises and local services.

Using a fiscal simulation based on a gross domestic product of Rp 25,000 trillion and a national revenue ratio of approximately 12%, Hashim suggested that raising the revenue collection ratio by six percentage points to 18% would mechanically generate an extra Rp 1,500 trillion annually, significantly easing fiscal deficit pressures and funding priority state programs.

To achieve this, the government is preparing to roll out an integrated digital taxation initiative on Nov. 9, 2026, deploying artificial intelligence and partnering with commercial lenders and major digital platforms to intercept and collect revenue at the transaction level.

Hashim also highlighted the government's upcoming universal banking initiative, which will provide every citizen turning 17 with an automated, free bank account to eliminate leakage in direct social safety net cash disbursements. Clarifying earlier public confusion, Hashim underscored that the policy provides free bank accounts, not free mobile handsets.

"Indonesia's future is not dark. Indonesia is not dark; Indonesia is bright," Hashim said. "However, we cannot allow the rupiah to reach Rp 21,000 or Rp 22,000. That would carry exceptionally negative political and economic fallout."