Post-Eid 2025: Rupiah Weakens, Purchasing Power Declines

April 10, 2025 | 05:30 pm

TEMPO.CO, Jakarta - The rupiah exchange rate surpassed Rp17,000 per US dollar after Eid Al-Fitr 2025. The depreciation of the exchange rate was followed by a series of decreases in the society's purchasing power that have been occurring periodically since 2024.

Depreciation of the Rupiah

The value of the rupiah against the US dollar has continued to significantly depreciate in recent months, especially at the beginning of 2025. Achmad Nur Hidayat, an Economist and public policy observer at the Universitas Pembangunan Nasional Veteran Jakarta, revealed that domestic factors caused the rupiah depreciation to Rp17,261 per US dollar.

"This is not merely an external issue, but also reflects the lack of Bank Indonesia's readiness and the government's in building a resilient domestic economy," said Achmad in his official statement on Monday, April 7, 2025.

According to Achmad, the repeated depreciation of the rupiah reflects the fundamental fragility of Indonesia's economy. Indonesia experienced a current account deficit in 2025, which is predicted to swell to between 1.18 percent and 2.3 percent of the Gross Domestic Product. This deficit occurred due to chronic import dependencies in the retail, manufacturing, and energy sectors, despite Bank Indonesia's and the government's repeated warnings to accelerate industrialization and energy diversification.

Achmad also stated that Bank Indonesia failed to anticipate speculative capital inflows. Short-term foreign capital inflows into Indonesia became a safe haven for speculators. However, these funds easily left when global sentiment was deteriorating.

Decrease in Purchasing Power

The Center of Economic and Law Studies (Celios) revealed a decrease in purchasing power at the beginning of the year, or Eid Al-Fitr 2025. The weakening of society's consumption capacity is considered worse compared to the period of the previous Eid Al-Fitr.

The Director of Economics at Celios, Nailul Huda, stated that the society's purchasing power declined due to the prevalent pattern of layoffs. The layoffs have led to a weakened consumption performance. One of the indicators is the Consumer Confidence Index (CCI).

"The situation is quite anomalous. Referring to the period from 2022 to 2024, there is usually an increase in CCI in January due to consumer optimism at the beginning of the year. Consumer confidence weakening also occurred in February 2025," said Huda in an official statement on Tuesday, April 1, 2025.

According to Celios' data, the decrease in society's purchasing power can also be observed from the decline in the Real Sales Index (RSI). In December 2024, the RSI reached 222 points and dropped to 221.5 in early 2025, unlike the movement from December 2023 to January 2024, which was still positive. This means that consumers are not confident in the economy of 2025, leading to a decrease in retail sales. As a result, the society's purchasing power is further eroded.

Additionally, there is also a decrease in deflation. The additional circulating money is predicted to be only around Rp114.37 trillion this year, while additional circulation during Ramadan and Eid Al-Fitr 2025 reached Rp136.97 trillion. According to Celios, the Additional Amount of Circulating Money (ACM) during Ramadan and Eid Al-Fitr 2025 weakened by 16.5 percent compared to the same period in 2024.

Anastasya Lavenia Y, Ilona Estherina, Nabiila Azzahra, Sultan Abdurrahman, and Rehan Oktra Halim contributed to the writing of this article.

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