Businesses Increasingly Squeezed by Rupiah Depreciation

The rupiah currency is still trading in the range of 17,070 per US dollar on Thursday, 9 April 2026. Citing Trading Economics data, at 10:00 on Thursday, the rupiah was recorded at 17,073 per US dollar. The rupiah has consistently been at the 17,000 level per US dollar since the beginning of this week, even dipping to 17,100 per US dollar. Chair of the Indonesian Employers Association (Apindo) Shinta Kamdani stated that this exchange rate weakening has a very negative impact on business actors. “We are very concerned about the persistent weakening that is occurring,” she told Tempo, as quoted on Thursday, 9 April 2026. According to Shinta, the rupiah’s weakening impacts rising inflation caused by increased production costs, or cost-push inflation. This particularly affects business actors in the manufacturing sector. Because the manufacturing industry generally uses imported production input components. When the dollar strengthens, import costs will rise. Based on an Apindo survey, manufacturing companies have import raw material needs ranging from 35-70 percent. On average, less than 30 percent of those imported components can be produced or substituted domestically. Thus, the increase in inflationary burden on production costs will pressure the manufacturing industry. In addition, another impact of the rupiah’s weakening is that companies are increasingly struggling to create cash flow to maintain existing production volumes. The next negative impact appears in the form of thinning profits or profit margins to ensure the cost-push inflation burden does not excessively disrupt market prices. This can also lead to a decline in aggregate demand. This Vice Chair of the Indonesian Chamber of Commerce and Industry (Kadin) hopes that the government can carry out all fiscal and monetary interventions to create exchange rate stability. Even pushing for the exchange rate to strengthen to the APBN target level of 16,500 per US dollar. This is so that these negative impacts can be better managed or addressed before becoming a major burden for the business world.