Rupiah Slides Toward Rp 17,000 per Dollar as BI Succession Speculation Shakes Markets

JAKARTA, Investortrust.id — The rupiah nearly touched Rp 17,000 per US dollar on Monday, Jan 19, 2026 in Jakarta as market sentiment deteriorated amid speculation over the nomination of Deputy Finance Minister Thomas Djiwandono as a candidate for Deputy Governor of Bank Indonesia, a move some investors fear could undermine central bank independence.

The Jakarta Interbank Spot Dollar Rate showed the rupiah closing at Rp 16,935 per US dollar, while Bloomberg data recorded a weaker spot close at Rp 16,955 per US dollar.

Finance Minister Purbaya Yudhi Sadewa said part of the pressure stemmed from market speculation surrounding Thomas’s potential move to Bank Indonesia.

“So maybe part of the speculation is when Thomas goes there, people speculate that the independence of Bank Indonesia will be lost,” Purbaya said at the DPR complex.

Despite the currency pressure, Purbaya stressed that Indonesia’s economic fundamentals remained strong and continued to attract foreign capital flows into the Jakarta Composite Index.

“It is impossible that only domestic investors pushed the index to that level. Foreign inflows are clearly there, so it is only a matter of time before the rupiah strengthens as dollar supply increases,” he said.

Purbaya added that the government was focused on ensuring ample liquidity in the financial system and accelerating government spending early in the year to support economic stability.

“If liquidity in the system is sufficient, recycling works. After that, we will improve the investment climate by removing bottlenecks,” he said.

He later dismissed concerns that a possible exchange of positions between Thomas Djiwandono and outgoing BI Deputy Governor Juda Agung would weaken the central bank’s independence.

“Where is the basis for that? How could independence be eroded?” Purbaya said.

He argued that independence was defined by the absence of direct intervention, not by an official’s institutional background.

“As long as there is no direct intervention in decision making, BI is independent. We run fiscal policy, they run monetary policy,” he said.

Chairman of the House of Representatives Commission XI Mukhamad Misbakhun echoed the view, saying Thomas’s nomination would not compromise Bank Indonesia’s autonomy.

“What does this have to do with independence? Do not turn insinuations into issues that degrade Mr Thomas’s own capability,” Misbakhun said.

Market analysts, however, offered a different explanation for the rupiah’s weakness, pointing to global factors rather than domestic political speculation.

Commodity and currency analyst Ibrahim Assuaibi said the rupiah was under pressure mainly due to geopolitical tensions and global uncertainty.

“If the finance minister says it is because Thomas Djiwandono will become a deputy governor, that has nothing to do with it,” Ibrahim said.

He said the escalation of geopolitical tensions involving the United States and Europe, alongside fears of widening fiscal deficits at home, weighed more heavily on the currency.

“US threats of higher tariffs and global military tensions are the main drivers. On the domestic side, investors are worried about a widening trade and fiscal deficit,” he said.

Ibrahim noted that the rupiah had already touched Rp 17,030 per US dollar in the offshore non deliverable forward market, raising the risk of further depreciation ahead of the Bank Indonesia policy meeting.

Separately, Bank Indonesia confirmed that Deputy Governor Juda Agung had formally submitted his resignation effective Jan 13, 2026.

“We confirm that Deputy Governor of Bank Indonesia, Mr Juda Agung, submitted his resignation to the President effective Jan 13, 2026,” said BI Communications Department Head Ramdan Denny Prakoso.

He said BI would remain focused on maintaining rupiah stability and safeguarding the financial system ahead of the January 2026 Board of Governors Meeting.