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TEMPO.CO, Jakarta - Indonesia’s Coordinating Minister for Food Affairs Zulkifli Hasan said the government is prepared to provide subsidies if food commodity prices surge due to the weakening rupiah against the US dollar.
“There is already a budget allocated for unexpected situations, so subsidies can be provided,” Zulkifli said in Jakarta on Wednesday, May 13, 2026.
Zulkifli, widely known as Zulhas, said the government’s intervention could include subsidies for the distribution and shipping costs of food commodities. He added that the central, provincial, and regional governments would coordinate in providing support to stabilize food prices.
Meanwhile, Trade Minister Budi Santoso said the weakening rupiah has not yet had a significant impact on food commodity prices.
“So far conditions remain normal, there is no issue,” Budi said.
Several Food Commodity Prices Rise
Data from Indonesia’s Trade Ministry as of May 12, 2026, showed fluctuating prices among several food commodities. Bulk palm cooking oil rose 0.17 percent from the previous day to Rp19,560 per liter.
Prices of imported commodities such as soybeans also increased. Soybean prices were recorded at Rp13,607 per kilogram on May 12, up 0.19 percent from the previous day and moving further above the government’s reference purchasing price range of Rp11,400 to Rp12,000 per kilogram.
The rupiah weakened past the psychological threshold of 17,500 per US dollar on Tuesday morning, May 12, 2026. Google Finance data showed the rupiah trading at Rp17,509 per US dollar at around 11 a.m., while Bloomberg data recorded the spot rupiah at Rp17,512 per dollar at the same time, down 98 points.
Josua Pardede, chief economist at Permata Bank, said pressure on Indonesia’s financial markets, particularly the rupiah exchange rate, has been driven by both global and domestic factors.
From the global side, Josua said the rupiah’s depreciation has been triggered by rising energy inflation, expectations surrounding global interest rates, and stronger demand for the US dollar.
“Ultimately, there is a shift among investors who previously placed assets in developing countries to move toward safer assets,” Josua said on Tuesday, May 12, 2026.
He noted that the rupiah is not the only Asian currency under pressure, as many regional currencies have also weakened against the US dollar amid global uncertainty.
According to Josua, pressure on the rupiah is not solely caused by monetary factors but has also been influenced by assessments from international institutions. He cited MSCI’s evaluation regarding share ownership and liquidity, which contributed to foreign capital outflows from Indonesia’s financial markets from the beginning of the year through April 2026.
Moody’s and Fitch Revise Indonesia Outlook to Negative
In addition to MSCI, international rating agencies Moody's and Fitch Ratings earlier this year revised Indonesia’s sovereign outlook from stable to negative. Josua said the assessments were linked to concerns over the credibility of government policies.
“A series of events, ranging from global risks to assessments and warnings from international agencies regarding Indonesia, have significantly affected the exchange rate,” he said.
“This has had a fairly massive impact on foreign investors’ risk appetite, especially toward rupiah-denominated assets.”
Foreign capital outflows from January to early May reached around US$2.2 billion in the stock market. Meanwhile, the bond market recorded nearly US$700 million in outflows, although this was partially supported by short-term inflows into Bank Indonesia securities.
According to PIER data, the rupiah has weakened 3.9 percent year-to-date. By the close of trading on Tuesday, May 12, 2026, the rupiah stood at Rp17,529 per US dollar, down 115 points.
Ilona Estherina contributed to the writing of this article.
Read: Why Investors Should Avoid Panic Over MSCI Rebalancing
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