The Indonesian economy has been on a mild expansionary path, and its resilience against external shocks has been strengthened, leading to its government bonds evaluated as investment grade. However, influenced by the tightening of the US monetary policy and uncertainties in the international financial market associated with the US-China trade tensions, the Indonesian rupiah has tended to decline against the US dollar, with a threatening capital flight by foreign investors. In this article I will review the recent development of the Indonesian economy and examine the risks for a decline of the rupiah and outflows of capital from Indonesia.