“This is happening when the fundamentals are good. It doesn’t make sense, actually. Usually the rupiah weakens when there is a disturbance in the fundamentals.”<\/p>\n\n\n\n
He did not elaborate further on what might be driving the current weakness. But his message was clear: from his perspective, the exchange rate does not reflect the broader economic picture.<\/p>\n\n\n\n
Pressure Inside Government<\/h2>\n\n\n\n
When asked whether the government would conduct additional stress testing on the state budget because of the weakening currency, Purbaya said the calculations had already been done.<\/p>\n\n\n\n
“We have already calculated that,” he said, referring to previous scenarios that modeled global oil prices reaching US$100 per barrel.<\/p>\n\n\n\n
“There is no problem. I don’t need to recalculate the state budget.”<\/p>\n\n\n\n
But he also acknowledged the pressure more personally.<\/p>\n\n\n\n
“Am I stressed? Yes, I am stressed,” he said.<\/p>\n\n\n
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Why Is the Rupiah Falling While Bond Yields Are Falling Too?<\/h2>\n\n\n\n
One unusual aspect of the current situation is that Indonesian government bond yields have been declining even as the rupiah weakens.<\/p>\n\n\n\n
Purbaya attributed this divergence partly to government intervention in the bond market.<\/p>\n\n\n\n
“Although the rupiah is weakening, bond yields are falling,” he said.<\/p>\n\n\n\n
“Because of government action. Our colleagues at the treasury are buying a little, so that yields remain controlled.”<\/p>\n\n\n\n
He argued that maintaining stability in bond markets remains important because foreign investors continue to watch yields closely when deciding where to place capital.<\/p>\n\n\n\n
“We are already starting to see foreign capital inflows into our bond market,” he said.<\/p>\n\n\n\n
“Going forward, there will be further government actions that will help the rupiah more significantly.”<\/p>\n\n\n\n
What This Means for Expats and Travelers in Bali<\/h2>\n\n\n\n
For foreign residents earning in dollars, euros, pounds, or Australian dollars, a weaker rupiah can create short-term advantages.<\/p>\n\n\n\n
On-the-ground spending becomes cheaper. Accommodation, restaurants, transport, and services may cost less when converted into foreign currency.<\/p>\n\n\n\n
But not everyone benefits.<\/p>\n\n\n\n
Expats earning in rupiah \u2014 including teachers, hospitality workers, NGO employees, and local entrepreneurs \u2014 may feel the opposite effect.<\/p>\n\n\n\n
Imported products become more expensive. International travel costs rise. Savings denominated in rupiah lose purchasing power abroad.<\/p>\n\n\n\n
For tourists, the equation is simpler.<\/p>\n\n\n\n
Your spending power may increase once you arrive.<\/p>\n\n\n\n
But currency weakness also creates uncertainty.<\/p>\n\n\n\n
Strong Fundamentals, Weak Currency<\/h2>\n\n\n\n
Purbaya insists Indonesia’s economic fundamentals remain healthy.<\/p>\n\n\n\n
He says foreign capital is beginning to return.<\/p>\n\n\n\n
He says government intervention is helping stabilize markets.<\/p>\n\n\n\n
Yet the rupiah continues moving lower.<\/p>\n\n\n\n
Whether markets eventually agree with that optimism remains unclear.<\/p>\n\n\n\n
For now, Bali’s money changers are adjusting their boards once again.<\/p>\n\n\n\n
And everyone \u2014 from tourists exchanging holiday cash to policymakers in Jakarta \u2014 is watching the numbers move.<\/p>\n\n\n\n