The Jakarta Composite Index (JCI) has been on a downward trend recently.
From December 30, 2024, to March 24, 2025, the JCI has fallen by 12.98% (year-to-date/ytd).
In line with the JCI's decline, the US dollar (USD) has strengthened against the Indonesian rupiah (IDR).
From the end of last year to March 24, 2025, the USD has appreciated by 2.47% (ytd) against the IDR.
The rupiah has depreciated from Rp16,162 to Rp16,561 per USD, as shown in the graph.
According to Muhammad Saiful Hakim, a researcher from the Business Analytic and Strategy Laboratory at Sepuluh Nopember Institute of Technology (ITS), the movements of the JCI and the rupiah are interconnected.
"The decline in the JCI not only impacts investors but also affects national economic stability," said Muhammad Saiful Hakim in his article on the ITS website (March 21, 2025).
"Large-scale capital outflow increases demand for the US dollar, potentially weakening the rupiah's exchange rate. If this pressure continues, people's purchasing power could be affected," he said.
He also assessed that instability in the capital market could have repercussions on the real sector.
"Companies that have difficulty obtaining funding tend to postpone business expansion. If this condition continues, the risk of layoffs (PHK) could increase, ultimately slowing economic growth," he continued.