The rupiah fell past previous historic lows against the US dollar amid growing global uncertainty, pressure from international markets, and concerns over capital outflows from emerging economies. Financial analysts say investors are increasingly moving money into safer assets such as the US dollar due to high interest rates in the United States and fears of slowing global economic growth.

Indonesia’s main stock index also slipped as foreign investors sold shares in banking and commodity-related companies. Economists warned that the weaker rupiah could increase the cost of imports, fuel, and foreign debt repayments for Indonesian businesses.

Speaking during a public event, President Prabowo attempted to calm fears surrounding the currency’s depreciation. He argued that ordinary Indonesians living in rural areas would not feel the immediate impact because they conduct most transactions using the local currency rather than US dollars.

“The economy is strong,” the president said, stressing that Indonesia still has solid economic fundamentals, including stable domestic consumption and government spending.

However, some economists disagreed with the president’s comments, warning that a weaker rupiah could eventually affect everyday prices, including food, fuel, transportation, and imported goods. Analysts noted that even villagers who do not directly use dollars may still experience rising living costs if import prices continue increasing.

Indonesia’s central bank, Bank Indonesia, is expected to closely monitor the currency market and may intervene to stabilize the rupiah if volatility continues. The bank has previously used foreign exchange reserves to defend the currency during periods of sharp depreciation.

The rupiah’s decline comes at a time when several Asian currencies are facing pressure from global financial instability and a stronger US dollar. Market observers say Indonesia’s large dependence on foreign investment makes the country particularly sensitive to changes in global investor sentiment.

Despite the market turbulence, government officials insist that Indonesia’s long-term economic outlook remains positive due to infrastructure investment, strong consumer demand, and steady economic growth.

Economists say the coming weeks will be crucial in determining whether the rupiah can recover or if further intervention from the central bank will be necessary.