The Jakarta Stock Exchange Index composite index shed 12.132 points to close at 1,052.821, off a low of 1,042.991, on volume of 973.24 million shares worth 1.24 trillion rupiah (124.68 million dollars).
Declining stocks led advancers 77 to 28, while 47 stocks were unchanged.
The rupiah was at 9,940/9,950 to the dollar in late trade compared to its closing level of 10,080/10,110 on November 1, the last day of trading before the Eid holiday.
"Investors are anticipating interest rates to increase further," said David Ferdinandus, an analyst with brokerage firm PT Anugrah Sekurindo Indah.
He said there was growing concern that inflation would remain high through to the year's end after higher-than-expected inflation in October.
Indonesia's central bank hiked its key interest rate sharply on November 1 to 12.25 percent in light of higher-than-expected inflation in October. The consumer price index (CPI) rose 8.7 percent in October from a month earlier and was up 17.9 percent year-on-year, the highest increments recorded since 1998.
Inflation in the 10 months to October was 15.7 percent.
Among major stocks, Bank Central Asia was down 75 rupiah at 3,050 while Bank Rakyat Indonesia (BRI) was flat at 2,450.
Bank Mandiri was down 10 rupiah at 1,310 and Bank Danamon was down 50 at 3,850, off a low of 3,675.
Telkom was down 100 at 4,950, Gudang Garam was up 50 at 10,400, Indosat was flat at 4,975 but Unilever was up 250 at 4,600.