Claims that Rural Residents are Unaffected by US Dollar are Misleading

The Chairman of the Indonesian Empowered Consumer Forum (FKBI), Tulus Abadi, has assessed that President Prabowo Subianto’s remarks regarding rural residents being unaffected by the Rupiah’s weakness against the US Dollar are misleading. Tulus does not deny that villagers do not use US Dollars in their daily transactions; indeed, he notes that rural communities may have never even seen a US Dollar. However, the consumer protection activist reminded that Indonesia remains dependent on imported products. According to Tulus, several essential goods are inseparable from imports, including soybeans, wheat, garlic, fuel, LPG, and even asphalt requirements.

“Therefore, if the Rupiah crumbles against the Dollar, even the small folk in the villages will feel the impact because imports must be purchased using foreign exchange, namely Dollars,” Tulus stated in a written release on Sunday, 17 May 2026. Tulus emphasised that imported commodities are affected by the Dollar exchange rate. Import costs—borne by both the private sector and the state—will also increase if the Dollar rate surges. Tulus noted that if crude oil prices and the Dollar rate continue to skyrocket, the government will have to find ways to fund energy subsidies from the State Budget (APBN). “If the price of soybeans rises in the international market, the end result is that the price of tempeh will also rise. This means the small people will be increasingly squeezed and distressed.”

Furthermore, Tulus stated that the plummeting Rupiah has the potential to increase production costs for companies. A company’s cash flow can be eroded, potentially destabilising businesses, leading to consequences such as layoffs or products failing to find market absorption. Tulus asserted that President Prabowo’s statement that the collapse of the Rupiah index is not the concern of rural residents is incorrect. “Empirically, it is very simplistic to suggest that a worsening Rupiah has no bad impact on any class of society, especially the lower-middle class, whether in villages or urban areas.”

For Tulus, President Prabowo should provide certainty to the public and demonstrate strenuous efforts to stabilise the Rupiah against foreign currencies, particularly the Dollar, rather than lulling the public into a false sense of security with misleading statements. During a speech in Nganjuk Regency, East Java, on Saturday, 16 May 2026, President Prabowo stated he was not worried about the weakening of the Rupiah against the US Dollar. He assessed that the decline in the exchange rate does not directly impact rural communities. The Chairman of the Gerindra Party remarked that many people frequently claim Indonesia’s economy is in danger due to the continuous weakening of the Rupiah. “Now there are those who always—for some reason I do not understand—say every little while that Indonesia will collapse, will be in chaos, and so on, right?” he said. Prabowo urged the public not to be too concerned with the movement of the Rupiah against the Dollar. The former Minister of Defence mentioned that Indonesia’s condition remains safe compared to other countries, particularly in the food and energy sectors. He responded casually to the situation, noting that villagers do not use foreign currency in their daily lives. “The Rupiah goes this way, the Dollar goes that way. People in the villages do not use Dollars, do they?” he said. On the trading morning of Friday, 15 May 2026, the Rupiah had weakened to the level of Rp 17,600 per US Dollar, the highest level since the 1997-1998 Asian financial crisis.