The weakening of the rupiah exchange rate against the US dollar is\nconsidered to have a tangible impact on the lives of people in rural\nareas and low-income housing groups. Yusuf Rendy Manilet, an economist\nat the Centre of Reform on Economics (CORE) Indonesia, explained that\nthis impact can be felt directly by the lower class, even though they\nare not involved in transactions using foreign currencies such as the US\ndollar.<\/p>\n
\u201cIf asked whether the weakening of the rupiah is most felt by the\nlower class and rural communities, the answer is indeed yes. While they\ndo not transact directly using US dollars, many of their basic needs are\nheavily influenced by imported goods and raw materials,\u201d Yusuf stated\nwhen contacted on Monday (18\/5\/2026).<\/p>\n
\u201cThe impact is felt most rapidly in agriculture. Raw materials for\nfertilisers, pesticides, seeds, and even livestock medicine are still\nlargely imported. When the rupiah weakens, production costs rise.\nAlthough the government maintains fertiliser subsidies, non-subsidised\nfertilisers and other agricultural inputs usually rise more quickly. As\na result, farmers\u2019 margins are also pressured,\u201d he said.<\/p>\n
In addition to agricultural production aspects, this exchange rate\nmovement also extends to daily food consumption, which is a primary\ncommodity for rural residents. \u201cFrom the perspective of daily\nconsumption, many foods that are very close to rural communities are\nsensitive to the exchange rate. Wheat for instant noodles and bread is\nimported, as is a large portion of the soybeans used for tofu and\ntempeh,\u201d he revealed.<\/p>\n
He believes this economic pressure is further exacerbated by\ntransport operational costs and other vital components such as\nhealthcare. \u201cEnergy and distribution are also affected. When the\nexchange rate weakens, pressure on fuel and logistics costs increases.\nThis makes the cost of distributing goods to villages more expensive,\nwhile the cost for farmers to transport harvests also rises. The same\napplies to healthcare, as most raw materials for medicines are still\nimported, meaning medicine prices have the potential to rise as well,\u201d\nhe added.<\/p>\n
Yusuf added that the expenditure structure, which is dominated by the\nfulfilment of primary needs, is the main reason why the economic blow\nfrom the rupiah\u2019s weakening is felt much more significantly at the rural\nlevel.<\/p>\n
Tegu Yudo Wicsono, an economist and Dean of the Faculty of Economics\nand Business at the International Islamic University Indonesia, stated\nthat the impact of the rupiah\u2019s depreciation will be more palpable for\nthe middle and lower classes. \u201cThis is because they do not have many\nalternatives,\u201d he remarked.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economist-even-without-using-dollars-rural-residents-remain-impacted-by-rupiah-weakening-1780912736", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }