{
    "success": true,
    "data": {
        "id": 1734594,
        "msgid": "weakening-rupiah-forces-indonesian-businesses-to-delay-expansion-plans-1778586799",
        "date": "2026-05-12 18:25:28",
        "title": "Weakening Rupiah Forces Indonesian Businesses to Delay Expansion Plans",
        "author": " ",
        "source": "GALERT",
        "tags": "",
        "topic": "Economy",
        "summary": "The rupiah's depreciation beyond Rp 17,500 against the US dollar is compelling Indonesian businesses to postpone expansion plans and implement cautious financial measures, as stated by Shinta Kamdani of the Indonesian Employers Association (Apindo). Industries reliant on imported raw materials, which constitute 70% of manufacturing inputs and 55% of production costs, are facing surged expenses, squeezed margins, and challenges in passing on costs amid weak consumer demand. In response, firms are adopting selective growth strategies, enhancing currency hedging, restructuring debts, and pursuing operational efficiencies, though adaptation remains insufficient against global pressures like rising US Treasury yields and Middle East tensions.",
        "content": "<p>Weakening Rupiah Forces Indonesian Businesses to Delay Expansion\nPlans<\/p>\n<p>Jakarta. The weakening rupiah, which fell beyond Rp 17,500 against\nthe US dollar on Tuesday, is beginning to affect Indonesia\u2019s business\nsector, prompting companies to delay expansion plans and adopt more\ncautious financial strategies, according to a leading business\nassociation.<\/p>\n<p>Shinta Kamdani, chairwoman of the Indonesian Employers Association\n(Apindo), said the currency depreciation has become a serious burden for\ndomestic industries, particularly those heavily dependent on imported\nraw materials.<\/p>\n<p>Around 70% of manufacturing raw materials in Indonesia are still\nimported, while raw materials account for roughly 55% of total\nproduction costs, she said.<\/p>\n<p>\u201cAs a result, every depreciation in the rupiah is immediately\nreflected in higher input costs in rupiah terms,\u201d Shinta said on\nTuesday.<\/p>\n<p>Industries most affected include petrochemicals, plastics, food and\nbeverages, pharmaceuticals, and manufacturing.<\/p>\n<p>Shinta cited rising naphtha prices \u2013 a key feedstock for the plastics\nindustry \u2013 as an example, saying they had pushed resin prices up by tens\nof percent. The impact has spread to packaging producers and other\ndownstream industries.<\/p>\n<p>Beyond higher production costs, the stronger US dollar has also\nincreased the burden on companies carrying foreign currency debt,\nincluding interest payments and principal repayments.<\/p>\n<p>At the same time, businesses are struggling to raise selling prices\nbecause consumer purchasing power remains weak.<\/p>\n<p>\u201cPart of the cost pressure must be absorbed by businesses themselves.\nThis then squeezes margins and affects decisions on expansion and\nemployment,\u201d Shinta said.<\/p>\n<p>In response to the pressure, companies have begun adopting more\nprudent business strategies. One of the main approaches is selective\ngrowth \u2013 continuing expansion only in carefully chosen areas while\ntaking market demand, cost efficiency, and investment returns into\naccount, she said.<\/p>\n<p>Meanwhile, speculative investments or projects highly dependent on\nexternal conditions are increasingly being postponed.<\/p>\n<p>Many companies are also strengthening risk management by increasing\nthe use of currency hedging instruments to protect against rupiah\nvolatility. Businesses are additionally restructuring debt portfolios to\nachieve a more balanced mix between rupiah and foreign-currency\nliabilities.<\/p>\n<p>Operationally, many firms are focusing on efficiency measures,\nreducing capital expenditure, and diversifying imported raw material\nsuppliers, although domestic supply capacity remains limited in many\nsectors, she added.<\/p>\n<p>\u201cThere is still room for adaptation, but it is not fully sufficient\nto offset the scale of the current external pressures,\u201d Shinta said.<\/p>\n<p>Apindo believes the current pressure on the rupiah is being driven\nnot only by domestic factors, but also by global dynamics, including\nrising US Treasury yields and escalating geopolitical tensions in the\nMiddle East, which have encouraged capital flows into dollar-denominated\nassets.<\/p>\n<p>Tags: Keywords:<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/weakening-rupiah-forces-indonesian-businesses-to-delay-expansion-plans-1778586799",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}