Bank Indonesia stated that the authorities are closely monitoring market movements and will respond to ensure the rupiah's dynamics remain aligned with its fundamentals.

According to Bloomberg News on Friday morning (August 29, 2025), the statement came in response to selling pressure that has pushed the rupiah to weaken since the start of trading. The currency fell to its weakest level at IDR 16,424 per USD, making it the worst-performing currency in Asia.

Erwin Gunawan Hutapea, Executive Director of Monetary Management and Securities Assets at Bank Indonesia, said that the central bank has been active in the market to stabilize the rupiah through interventions in the foreign exchange spot market, bond market, and forward market (NDF), both domestically and offshore.

BI will also continue to optimize policy measures to ensure the effectiveness of its benchmark interest rate and its transmission to market rates, as well as maintaining sufficient liquidity.

The selling pressure did not only affect the rupiah but also hit the stock market. The Jakarta Composite Index (JCI) plunged into negative territory, losing 1.2% to settle at 7,859.

In the government bond market, yields on short-term tenors fell due to increased buying demand. The 2-year yield dropped 5.7 bps to 5.256%. However, longer-term yields rose, with the 5-year government bond yield up 4.8 bps, while the benchmark 10-year yield climbed 2.9 bps to 6.338%.

This wave of selling across currencies, stocks, and some bonds had been anticipated amid growing domestic concerns.

“The situation continues to develop unpredictably, raising the likelihood of fire sales among market participants, especially in riskier assets,” noted the analyst team at Mega Capital Sekuritas in their morning report.

Analysts project that the rupiah could slide further to around IDR 16,400–16,500 per USD, driven by foreign capital outflows, with a potential move toward IDR 16,500–16,700 per USD if social tensions persist.

“Pressure on the rupiah could trigger further selling in government bonds, with the 10-year yield expected to range between 6.35%–6.55%. We expect heavy intervention from BI today,” added the analysts, including Lionel Priyadi, Muhammad Haikal, and Nanda Rahmawati.

Social unrest has escalated since protests erupted on Monday and continued on Thursday, involving labor groups and students. Tensions rose sharply after Affan Kurniawan, an online motorcycle taxi driver, was killed after being run over by a tactical vehicle operated by the Police Mobile Brigade (Brimob).

Public anger has intensified, as seen in videos circulating on social media, showing fellow drivers demanding justice for their colleague at Brimob headquarters in Kwitang, Central Jakarta.