IMPACT OF MARKET ROUT
The turmoil has accelerated foreign capital outflows, extending a trend seen throughout 2025, said analysts. This could put pressure on the rupiah, they added, and may increase imported inflation, among other issues.
Among those affected by the market rout is Kars – a Tangerang-based retail investor who has been investing in Indonesian stocks since 2015.
Over the past few days, she has lost about 400 million rupiah – or some 20 per cent of her portfolio – due to the turmoil in the Indonesian market.
“I have seen things like this before. So, I will just wait,” said Kars, who wants to be identified only by her nickname.
The 45-year-old banker is optimistic that the government will soon take measures to stabilise the market.
“I am sure the government will act quickly. In the near future, I just want them to intervene more actively because at the moment, even the usual stocks like banking, which are normally good, are also down,” said Kars, who remains hopeful of her stock market prospects.
Jakarta-based housewife Nindita, 41, is another retail investor who has suffered about 10 per cent in paper loss since the market crash.
“The impact is that my net worth has decreased … I feel sad,” said Nindita, who only wants to be known by her first name.
Having been an investor for the past six years, she now hopes the market will soon recover.
Retail investors like Febry, Nindita and Kars have now largely shifted into a “wait-and-see” mode, as they hope for the market to recover and are willing to wait as they have no urgent monetary needs currently.
Bhima from CELIOS said that while this is still in the early days, if outflows continue, they will affect investors’ perceptions of Indonesia. These investors may be wary of investing in Indonesia, which could potentially hinder job growth.
He is also concerned about the rupiah getting weaker, especially as the Islamic holy month of Ramadan approaches in about two weeks, when Indonesians in the world’s largest Muslim-majority country tend to spend in preparation for Hari Raya.
The rupiah has fallen about 2 per cent in recent weeks against the United States dollar, placing it among the worst performing emerging Asian currencies.
This could lead to imported inflation, where prices rise due to the high cost of imported goods.
Analysts also predict some companies may delay their initial public offerings amid heightened uncertainty and tighter free-float requirements.
This means that firms may not have enough capital injection, said Tauhid from INDEF.
Separately, economist Yanuar from BIG warned that “the real risk is that this spreads beyond markets”.
“Currency weakness eventually affects purchasing power, jobs and growth,” he said, adding that if the situation worsens, it could spiral into an economic crisis and eventually a political one which could adversely affect the government.