Indonesian Rupiah Hits Record Low Amid MSCI Doubts and Political Uncertainty

Key Facts

The Indonesian rupiah fell to a new record low of 18,225 against the US dollar. Finimize reported that the decline was driven by a combination of a stronger US dollar, domestic political instability, and concerns raised by MSCI regarding the country's index reclassification.

Investors are demanding a higher premium for Indonesian assets following renewed political uncertainty and potential setbacks in the country's MSCI index status. This pressure on the currency persists despite annual GDP growth reaching 5.47% on November 5, 2026, which exceeded the forecast of 5.2%.

An interest rate decision is scheduled for November 18, 2026. Forecasts indicate a potential rate hike to 6% from the previous level of 5.75% as the central bank faces ongoing currency depreciation.