Jakarta, CNBC Indonesia - In recent weeks, the narrative that a\nweaker rupiah is a hidden blessing for the domestic economy has\nresurfaced on social media.<\/p>\n
Several financial influencers have been actively educating the public\nwith the classic premise that rupiah depreciation makes Indonesian\nproducts cheaper in global markets, thereby boosting exports.<\/p>\n
However, Bank Permata Chief Economist Josua Pardede has firmly\nclarified that this logic is flawed and could mislead businesses and the\ngeneral public.<\/p>\n
Theoretically, a currency depreciation does benefit raw commodity\nexporters, as US dollar-denominated export revenues convert to higher\nrupiah values. However, Josua cautioned that the domestic economic\nstructure is not that simple, given the complex supply chains in\nIndonesia\u2019s manufacturing sector.<\/p>\n
\u201cCommodity exporters do benefit directly, but we must also consider\nthe other side: manufacturing industries that need to import raw\nmaterials before exporting finished goods are actually burdened by\nrupiah weakness,\u201d Josua Pardede stated during a discussion with Bank\nIndonesia. This heavy reliance on imported raw materials is often\noverlooked by social media financial content creators.<\/p>\n
Furthermore, most manufactured goods relying on imported materials\nare intended for domestic consumption. Rising production costs due to\ncurrency depreciation trigger imported inflation, potentially eroding\nhousehold purchasing power. This could threaten the current national\neconomic growth momentum of 5.61%.<\/p>\n
Therefore, Josua emphasised that exchange rate stability is far more\ncritical for businesses than chasing a specific exchange rate level.\nBusinesses require currency movement certainty for short-to-medium-term\nplanning, such as ordering raw materials three to six months ahead.\nWithout stability, excessive rupiah volatility creates high market\nuncertainty.<\/p>\n
\u201cBank Indonesia\u2019s role is not to direct the rupiah to a specific\nlevel; it is to maintain stability. This is what businesses need most:\ncertainty and stability for their planning,\u201d Josua stressed. This\ncaution is reflected in the high level of undisbursed loans in domestic\nbanks, remaining above 20%.<\/p>\n
Ultimately, maintaining rupiah stability does not mean sacrificing\neconomic growth; it is a prerequisite for both foreign and domestic\ninvestment to continue. Honest education about the nation\u2019s economic\nfundamentals is essential to prevent the public from falling for the\nmyth that a weaker rupiah is an economic advantage.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/weak-rupiah-boosts-exports-economist-its-a-myth-1780162897", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }