JCI, Rupiah Strengthen After Prabowo's Economic Policy Address

Indonesia's financial markets showed a positive reaction to President Prabowo Subianto's state address and the unveiling of the 2027 Draft State Budget (RAPBN). The Jakarta Composite Index (JCI) rose 1.59 percent to close at 6,401.89 on Friday, August 14, 2026. Simultaneously, the rupiah strengthened by 50 points, or 0.28 percent, against the US dollar, closing at Rp17,827 per dollar.

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The positive market response demonstrated the increasingly clear direction of Prabowo administration’s economic policies.

Fakhrul Fulvian, Chief Economist at Trimegah Sekuritas Indonesia, interpreted the market's positive response as an indicator of the Prabowo administration's increasingly clear economic policy direction. He described the speech as the most convincing for the capital market since Prabowo took office, as it clearly outlined economic strategies. The 2027 RAPBN targets economic growth at 6 percent, an increase from the 2026 State Budget's 5.4 percent target. The government also aims to reduce the budget deficit to 2.4 percent of GDP, down from 2.68 percent in 2026.

Fulvian noted that the market is looking beyond just deficit figures, focusing on how growth will be generated, investments attracted, and the private sector stimulated. He pointed to several of Prabowo's proposed agendas, including downstreaming, the establishment of an Indonesia Financial Center, a Commodity Exchange, a Gold Bank, and capital market reforms, as efforts to mobilize economic resources more productively. Deepening capital markets and attracting private investment are seen as crucial for growth, although investors are still awaiting a detailed roadmap and concrete implementation plans.

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The market always looks at the bigger story than just the deficit figures. They want to know how growth will be generated, how capital will flow in, and how businesses can gain the confidence to invest.

Lukman Leong, a currency analyst at Doo Financial Futures, echoed this sentiment, stating that the rupiah's strengthening was a positive market response to the speech and the budget proposal. "I view this as cautiously positive," he commented. The challenge moving forward, according to Fulvian, lies in translating the development vision into consistent and predictable policies for market players, rather than merely formulating them. The Bank Indonesia's Jakarta Interbank Spot Dollar Rate (JISDOR) also reflected this trend, strengthening to Rp17,836 per US dollar.

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The rupiah strengthened against the US dollar, and the Jakarta Composite Index (JCI) rose due to the positive investor response to President Prabowo's RAPBN speech. I view this as cautiously positive.