The Chairman of the Indonesian Exporters Association (GPEI), Benny\nSoetragno, has shared his perspective on the causes behind the weakening\nRupiah against the US Dollar. According to him, the depreciation is\ndriven by sentiments regarding several factors, such as Indonesia\u2019s\nincreasing import data and concerns over rising benchmark interest\nrates. This stems from persistent inflationary pressures in the US\nremaining above the 2% target, leading to predictions that the US\nFederal Reserve will raise interest rates again.<\/p>\n
\u201cThe Rupiah exchange rate against the USD is already influenced by\nperceptions. Some data supports this; for instance, our imports are\nincreasing using USD. Because of inflation in the USA, the FED will\nraise lending rates, causing the USD to return home,\u201d said Benny via a\nshort message on Thursday.<\/p>\n
Benny noted that while this condition remains advantageous for\nexport-oriented entrepreneurs using domestic production, businesses are\ncurrently preparing by strictly managing their cash flow.<\/p>\n
Separately, the Chairperson of the National Leadership Council of the\nIndonesian Employers Association (APINDO), Shinta Kamdani, assessed that\nthe weakening Rupiah is already being felt in the real sector. She noted\nthat for the business world, the primary challenge is not just the\nexchange rate level itself, but the impact on production costs,\nfinancing costs, and business certainty. This is particularly critical\nas 70% of the industrial sector relies on imported raw materials.<\/p>\n
Consequently, the weakening Rupiah directly increases the cost of\ngoods sold, narrows business margins, and reduces the capacity for\ncompanies to expand. Shinta detailed that significant pressure is being\nfelt by the textile and textile products, chemical and petrochemical,\nplastic, basic metal, electronics, and automotive industries, among\nvarious other sectors that rely on imported components within their\nproduction chains.<\/p>\n
Furthermore, Shinta explained that the business community has\nundertaken various mitigation steps to address the impact of the\nexchange rate depreciation. \u201cMany companies are choosing to implement\noperational efficiencies, hiring freezes, controlling non-essential\ncosts, delaying expansion and new investments, diversifying markets,\nstrengthening the use of local raw materials, and employing hedging\nstrategies to manage exchange rate risks,\u201d she said. She added that\nbusinesses are currently focused on maintaining business continuity and\npreserving employment amidst rising cost pressures.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/triggers-for-us-dollar-surge-to-rp18-000-according-to-business-leaders-1780826374", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }