Logo Kadin Indonesia

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

Kadin: Weakening of Rupiah Exchange Rate Must Be Anticipated Immediately

The rupiah exchange rate, which has reached Rp16,000 per US dollar in recent days, must be anticipated immediately before it has a deeper impact on the national business world.

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Arsjad Rasjid, said that the weakening of the rupiah was caused by the Middle East conflict. The weakening of the rupiah will have an impact on rising production costs for industrial sectors that depend on imported raw materials, such as manufacturing. In addition, it will also have an impact on the cost of debt burdens that are valued in US dollars.

"This must be fully anticipated, because it can affect product selling prices and people's purchasing power," said Arsjad, Wednesday (17/3/2024).

Arsjad added that the weakening rupiah also has an impact on financial instruments in Indonesia such as gold, crude oil, and the 10-year treasury yield (US10Y bond yield) which has increased.

According to him, the risks posed to the financial market continue to increase the concerns of market participants which can be seen from the pressure of capital outflows. Therefore, Kadin hopes that the government can be responsive in sharing fiscal policies so that inflation and people's purchasing power can be maintained. Kadin also hopes that Bank Indonesia (BI) will pay attention to the direction of interest rate policy and exchange rate control strategies to maintain market confidence.

He said regional strategic cooperation needs to be communicated immediately with various world central banks to anticipate the regional and global impacts of conflict escalation.

Arsjad added, Kadin also continues to support the government to intensify the level of domestic content (TKDN), especially for products or industries that still depend on imports.

"So that if there is a 'shock' situation in the exchange rate, production costs and industry in general will not be too affected," said Arsjad.

Indonesia Catalogue Expo and Forum to be Held at the End of May 2024
ITIF 2024 Encourages Investment in Tourism and Creative Economy Sector
Kadin East Java and International Eurasian Council Explore Cooperation in Energy and Infrastructure Sectors

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry