Indonesia unrest: why protests over living costs are rattling markets

Explainer: Why Indonesia’s rupiah sank to 16,500 and stocks tumbled 3.6% during protests [https://invezz.com/wp-content/uploads/2025/09/20250901_122306_15BM6.png] Indonesia is navigating one of its most testing moments in years. A wave of protests over the cost of living, unemployment, and lawmakers’ allowances has shaken confidence in Southeast Asia’s largest economy. The unrest has spilled into financial markets, with the Jakarta Composite Index falling as much as 3.6% on Monday and the rupiah weakening to 16,500 against the US dollar, its softest level since 1 August, according to LSEG data. WHY ARE INDONESIANS PROTESTING? The protests began as demonstrations against rising living costs and unemployment but quickly expanded to include outrage over lawmakers’ allowances. Reports that housing benefits for members of parliament are roughly 10 times the monthly minimum wage struck a nerve with lower-income citizens already strained by inflation, tax hikes, and job cuts. The unrest escalated last Thursday when a motorcycle taxi driver was reportedly killed during police action. That incident set off broader calls for police reform and ignited violent protests across several cities. Demonstrators ransacked government offices, stormed the homes of…