Rupiah Weakens Economic Sector Threatened, HIPMI Suggests Government Do These Things
Secretary General of the Central Executive Board of the Indonesian Young Entrepreneurs Association or BPP HIPMI, Anggawira, stated that the weakening of the rupiah exchange rate had an impact on a number of economic sectors in Indonesia. A number of industrial sectors were affected by the increase in the United States dollar (US dollar) exchange rate.
Anggawira mentioned imports and trade. According to him, this sector was most affected because imported goods became more expensive. This includes raw materials and capital goods which are important for domestic industry, he said, when contacted via messaging application on Friday evening, July 5 2024.
This impact also targets the energy and fuel sectors. Anggawira said that most of the energy, especially fuel, was imported. The weakening of the rupiah will increase the cost of energy imports, which can then increase production and transportation costs.
Next is the manufacturing sector. These industries depend on imported raw materials and will experience increased production costs. The increase in production costs, said the Expert Team of the Minister of Investment/Head of the Investment Coordinating Board, can reduce profit margins and product competitiveness in the international market.
Another sector affected is transportation and logistics. According to Anggawira, operational costs for this sector could increase due to increases in fuel prices and other imported components. Also in the tourism sector, he said, although domestic tourists are more likely to vacation domestically because of the high cost of vacationing abroad. This sector must pay attention to the price of plane tickets and tourist services which may increase, said Anggawira.
Another sector affected by the weakening of the rupiah is banking and finance. He explained that exchange rate fluctuations can affect companies financial stability and their ability to pay debts in foreign currency.
As a result of the weakening of the rupiah and its impact on a number of economic sectors, Anggawira said the government needed to take a number of steps. First, foreign exchange market intervention. The central bank can intervene in the foreign exchange market to stabilize the rupiah exchange rate, said Anggawira.
Next, Anggawira suggested, increasing foreign exchange reserves. Strengthening foreign exchange reserves can help provide stability and market confidence in the countrys ability to meet foreign exchange obligations. Another solution is economic diversification. Reducing dependence on imports by encouraging domestic production and exports can help reduce the impact of the weakening rupiah.
Apart from that, he explained, controlling inflation. He said ensuring inflation remains under control through appropriate monetary and fiscal policies can help maintain peoples purchasing power. Next, encourage foreign investment. Improving the investment climate to attract foreign direct investment (FDI), he said, could help increase foreign exchange inflows.
Lastly, Anggawira said debt management. According to him, manage foreign debt wisely and consider the use of financial instruments that can protect against exchange rate fluctuations.
With these steps, the government can help reduce the negative impact of the weakening rupiah and maintain economic stability, said the General Chair of the Mineral and Coal Energy Suppliers Association.
Forexindo Futures Profit Director Ibrahim Assuaibi said the rupiah closed up 52 points against the US dollar in trading this weekend, Friday, July 5 2024. Although previously, the rupiah had strengthened 55 points at the level of Rp. 16,277 from the previous closing at the level of Rp. 16,330.
Meanwhile, for trading next Monday, the rupiah currency was fluctuating. However, it closed stronger in the range of IDR 16,220 - IDR 16,320," said Ibrahim in a written statement, Friday, July 5 2024.
According to Ibrahim, the rupiah and dollar futures index fell to its lowest position in the last three weeks, trading was quiet due to the holiday. He said while rising expectations of a rate cut were weakening the greenback. Focus now turns to the key nonfarm payrolls data for further clues on interest rates.
Source : Tempo.co
Jul 6, 2024
Bank note current rate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Last Updated :18 Feb 2025 - 03:24 PM | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
These are indicative rates. For actual exchange rates, please visit or call our outlets at (0361) 4741 940. We reserve the right to change the rates at any time without prior notice. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Please Note : Central Kuta does not sell foreign currencies in small denominations. Please Contact us for further information. |