Rupiah vs dollar: currency risk for a Bali property investor

On Bali, villa prices and many short-term rentals are denominated in US dollars, while taxes, upkeep, staff salaries and some long-term rents are in rupiah. This currency gap directly affects your real return. Here are the numbers and what to do about them. How the rate moved (annual average, rupiah per US dollar): — 2019 — about 14,150; — 2022 — about 14,850; — 2023 — about 15,240; — 2024 — about 15,855; — November 2025 — about 16,735; — June 2026 — about 17,800 (Bank Indonesia official rate, JISDOR). Over 2019–2026 the rupiah weakened against the dollar by roughly a quarter. Context from the regulator. Indonesia's inflation in May 2026 was 3.08% year-on-year, within Bank Indonesia's target band of 2.5% ±1%. The policy rate (BI-Rate) was raised to 5.75% in June 2026 — the central bank explicitly calls this a step to stabilize the rupiah. The IMF's 2025 review assesses Indonesia's external position as resilient and the exchange rate as a "shock absorber." Where the risk sits for an investor: — you buy and value the property in dollars, but pay taxes (PBB and BPHTB are based on the rupiah NJOP valuation), utilities, repairs, management and salaries in rupiah; — short-term rental to foreigners is often in dollars — then a weaker rupiah tends to help you: rupiah costs get cheaper in dollar terms; — but if income is in rupiah (long-term local rent) while you account in dollars, a weaker rupiah erodes your dollar yield; — at exit: if you sell in rupiah, converting to dollars at a weaker rate reduces the result. What to do about it: — calculate yield in the currency you actually earn in, and separately after conversion; — don't assume a stable rate 5–10 years out: the recent trend is a gradual rupiah depreciation; — keep a cost buffer in rupiah so you don't have to convert at a bad moment; — remember that leasehold and taxes are tied to rupiah values — which partly smooths the currency risk on the cost side. Important: rates and policy move fast — check current figures on the Bank Indonesia site. Sources: — Bank Indonesia, official JISDOR rate: https://www.bi.go.id/en/statistik/informasi-kurs/jisdor/default.aspx — Bank Indonesia, rate and inflation press releases: https://www.bi.go.id/en/publikasi/ruang-media/news-release/Default.aspx — World Bank (annual average rate), IMF Article IV 2025