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The program protests with the Indonesian flag in front of the police headquarters, which was set on fire and looted during the Surabai demonstrations on August 31, 2025.
Juni Kriswanto | AFP | Gets the image
Indonesia faces a tough political climate, as it fights protests over the cost of life, payment of legislators and violence in the police, harm the mood of investors in the largest economy of Southeast Asia.
On Monday, the composite Jakarta index fell 3.6%, while the Indonesian Rupee depreciated up to 16,500 to the US dollar the weakest one day on the day since August 1-by LSEG data.
While violence and protests are convinced of investors’ trust, they will hardly challenge the main growth history for Indonesia, several market observers said.
The latest Selloof was primarily “mood” when investors responded to events last weekend, said Hou Chung van, director and head of the Asian fixed income.
Indonesia is still among the more stable emerging markets, Hou, giving up the demonstrations as the nearest failure. “I don’t think it completely changes history at this point.”
According to Christopher Wong, FX analyst at OCBC Bank, presumably the closest potential softness for Rupee will be temporary and probably abolished when the internal uncertainty disappears. He abstained from more accurate forecasts, citing enhanced uncertainty.
It was unclear whether the demonstrations in Jakarta or other cities would continue on Monday, and some Indonesian students and civil society groups abandon the protests to avoid severe escalation by the authorities.
Investors will watch the next government steps to resolve the public and improve market confidence, said Ari Jajj, head of Indonesian study, Macquarie Capital. “On a small positive side, Indonesia can arise stronger if structural reforms are fulfilled.”
Radhika RAO, economist DBS, agreed that long -term growth drivers remain intact to Indonesia. Investors will monitor any signs of government priority to increase growth and jobs, expecting a part of Jakarta’s cost reduction can be redirected to alleviate unemployment.
According to the Bank in Indonesia, there is still enough space to fulfill the policy, hoping that the Central Bank acts quickly to calm the markets and join Rupee if necessary.
According to LSEG, the yield on 10-year state bonds of Indonesia has been reported to 6,335, while the yield of 30-year debt was little changed at 6,850, Lseg reports.
That fueled the protests
Thousands of protesters in several major cities in the southeastern Asian country rallied about a week, demonstrating against increasing the cost of life, high unemployment and what many consider excessive payment of legislators.
Help for housing legislators who are said 10 times higher than monthly minimum Salaries at a time when tax hiking, dismissal and inflation suffered from low income Indonesians were key to inciting public anger.
This dissatisfaction with economic difficulty has turned into more indignation after there was a taxi driver on motorcycles justify killed during the police action in Protest site last Thursday. This incident began a wave of fierce protests in several Indonesian cities, calling for police reform.
Protests intensified over the weekend, and the riots aimed at the legislators’ homes, property and robbery, as well as burning government buildings, reports The media. Hundreds of people justify Finance Minister Sri Mulani’s residence in South Tangegirgang, forcing their path and take values.
In an attempt to stop the public anger, the President of Indonesia sorry for the Subion that on Sunday the country’s parliament would listen and act on people, obliging to stop large allowances for legislators.
Indonesia, the fourth largest economy in the world with a population of 284 million, was regarded as one of the most stable economies of Southeast Asia. Recent protests, which killed at least five and wounded hundreds, have created the worst crisis for the country because the Subion took to post about a year ago.
“This point is a key test for the pardon to dissent,” said Bob Herrera-Lim, head of Tena political consultation. “The president may worry that the continuation will give in to the streets for more than a few days can give the impression that he calls on the popular opposition to call his government”
The president warned that firm actions would be initiated against cruel demonstrators. “We cannot deny that the signs of extrajudicial, even illegal actions begin to appear, some even lead to betrayal and terrorism,” he said, ordering the military and police to take violent actions against the unrest and marauders.
