Flooring Guide by Cinvex – JAKARTA – International media outlets are highlighting the Indonesian rupiah’s decline against the US dollar and the significant drop in the Jakarta Composite Index (IHSG) following recent violent protests outside the Indonesian House of Representatives (DPR RI).
Reuters, in its report titled “Indonesia Stocks, Rupiah Dive as Political Unrest Jolts Investors,” notes a sharp fall in Indonesian stocks and the weakening rupiah, directly linking these events to anti-government demonstrations near the DPR building in Jakarta. Thousands of protestors, many workers, demanded higher wages and lower taxes.
Indonesia is bracing for potentially more intense protests after a motorcycle taxi driver died in clashes between police and demonstrators. The protests also targeted the high allowances received by DPR members.
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Similarly, Forbes, in its article “Indonesian Stocks, Rupiah Drop As Jakarta Protests Escalate,” reported that political tensions are putting significant pressure on Indonesian stocks and the rupiah, coinciding with a substantial outflow of foreign capital.
The Indonesian rupiah closed weaker against the US dollar on Friday, August 29, 2025. This weakening of the rupiah is directly attributed to the escalating socio-political unrest stemming from the demonstrations and resulting civilian casualties.
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According to Bloomberg data, the rupiah depreciated by 0.90% to Rp16,499.50 per US dollar, while the US dollar index strengthened by 0.12% to 97.93.
Currency and commodity analyst Ibrahim Assuaibi predicts the rupiah’s weakening against the US dollar will continue into next week. He attributes this to the volatile domestic socio-political climate that has intensified since Thursday.
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“The escalating domestic social and political tensions, ignited since Thursday, August 28, 2025, are likely to worsen,” stated Ibrahim in his analysis on Friday, August 29, 2025. “The government’s plan to provide housing allowances to DPR members further fuels this tension.”
Ibrahim anticipates further escalation due to the loss of life during the demonstrations. He also points to bureaucratic issues, including alleged collusion and nepotism, as contributing factors to the unrest and resentment among professionals struggling for employment.
Meanwhile, data from the Indonesia Stock Exchange (BEI) shows the IHSG fell by 1.53% or 121.59 points, closing at 7,830.49. Throughout the day, the composite index reached a low of 7,765.59 and a high of 7,913.86.
Despite the downturn, 122 stocks managed to close in positive territory. 610 stocks declined, and 70 remained unchanged. The total market capitalization reached Rp14.211 trillion.
Amidst the market volatility, BEI Director of Development, Jeffrey Hendrik, affirmed the underlying strength of Indonesia’s capital market.
“From the exchange’s perspective, we see that the fundamentals of our stock market remain strong. Technical corrections are to be expected,” he stated in Jakarta on Friday, August 29, 2025.
Summary
Recent violent protests in Jakarta, Indonesia, sparked by demands for higher wages, lower taxes, and criticism of parliamentary allowances, caused a significant drop in the Jakarta Composite Index (IHSG) and a weakening of the Indonesian rupiah against the US dollar. International news outlets reported a sharp decline in Indonesian stocks and substantial foreign capital outflow, directly linking these events to the escalating unrest. The death of a motorcycle taxi driver during clashes with police further fueled the protests and market volatility.
The IHSG fell by 1.53% on August 29th, 2025, closing at 7,830.49, while the rupiah depreciated by 0.90% to Rp16,499.50 per US dollar. Analysts predict continued rupiah weakening due to the volatile socio-political climate and government policies. Despite the market downturn, the Indonesia Stock Exchange director affirmed the underlying strength of the Indonesian capital market, attributing the decline to expected technical corrections.