JAKARTA - Following last week’s sell-off, the rupiah fell to new lows on June 8, tracking most regional currencies, while the Jakarta stock index plunged as much as 4 per cent.At 1.22 pm Singapore time, the Indonesian currency was down 0.8 per cent to 18,173.50 against the US dollar. Against the Singapore currency, the rupiah weakened 0.3 per cent to 14,093.66.“The next two weeks are critical,” said Mohit Mirpuri, a partner at SGMC Capital in Singapore. “The market is looking for clear signs of fiscal discipline, policy consistency and a strong commitment to macroeconomic stability.”Mounting concerns over the government’s economic management, confusion regarding new commodity export rules, and revived concerns about Indonesia’s sovereign credit profile have sent Indonesian assets spiralling. Just five months after hitting a record high, the benchmark stock index has tumbled nearly 39 per cent to become the worst performer in 2026 among more than 90 global gauges tracked by Bloomberg.The rupiah has weakened about 8 per cent to become the worst-performing currency in Asia in 2026 as it fell to multiple record lows and breached a psychological level of 18,000 per US dollar last week.Analysts said Indonesian authorities need to provide firmer policy guidance and unveil concrete steps to improve sentiment as investors will remain unconvinced by assurances alone.Market participants will largely be in a wait-and-see mode ahead of Bank Indonesia’s interest rate decision on June 18, and MSCI’s review of the country’s investability later in June, analysts said. In the meantime, rumours of a reshuffle of policymakers will add to uncertainty, even as the Finance Ministry and central bank unveiled another measure at the weekend to support bond yields and attract inflows. Bank Indonesia (BI) governor Perry Warjiyo and Finance Minister Purbaya Yudhi Sadewa held a joint briefing at Parliament on June 4, pledging that the authorities will aim to maintain sufficient liquidity in the market and work together to boost yields and capital inflows. The central bank will also increase the interest rate for government cash placed with it, Perry said.Josua Pardede, chief economist at PT Bank Permata in Jakarta, said: “The statement on Saturday can be a start to reduce market pressures but it’s still not enough to sustainably turn the market direction.”The authorities should provide details on the remuneration rate, the scale of government deposits, and the implications for BI’s costs and the government’s bond issuance as “otherwise, markets could interpret it as a blurring line between fiscal and monetary policy, limiting any positive impact on the rupiah”, Josua said.Global investors are increasingly losing confidence in Indonesia on President Prabowo Subianto’s more populist and interventionist agenda. That has led them to pull a net US$422 million (S$544 million) out of Indonesian bonds in 2026 and a net US$3.56 billion from local stocks in the same period – already higher than equity outflows in 2020 during the Covid-19 pandemic. The Iran war has compounded those concerns, accelerating capital outflows and a broader retreat from risk, as elevated oil prices increase the energy subsidies budget.Mirpuri said: “The bigger issue is not communication but policy clarity.”Lionel Priyadi, a macro strategist at Mega Capital Sekuritas, said: “For the rupiah to strengthen back to below 18,000 levels, BI would need to hike the interest rate by more than 50 basis points.” He expects a 75-basis-point increase at the central bank’s next rate decision on June 18. “For now, the markets will remain in a wait-and-see mode,” he added.The “optimistic narrative” must also be followed by a more detailed policy response, Josua said.“These days, pressures are beyond just exchange rate volatility, but are related to risk perception towards Indonesia,” he added. “Investors are not only attracted by high returns, but also by their belief that Indonesia’s economic outlook remains credible.” BLOOMBERG