Economist Advises Managing Finances and Reducing Consumptive Lifestyle Amid Rupiah Weakening
An economic observer from the National University of Education (Undiknas) Denpasar, Bali, Prof Dr Ida Bagus Raka Suardana, has advised the public to manage their finances and reduce consumptive lifestyles in response to the weakening of the rupiah.
“As ordinary citizens, the first thing to do is to change consumption patterns to be wiser and more productive,” Raka Suardana stated in Denpasar on Wednesday. The Professor of the Faculty of Economics and Business at Undiknas added that when the rupiah weakens, the prices of imported goods typically rise faster than public income.
Therefore, he added, the public needs to reduce consumptive lifestyles, particularly by avoiding the purchase of non-essential imported goods. Prioritising local products is a simple yet vital step to help maintain national economic stability while strengthening domestic MSMEs (Micro, Small, and Medium Enterprises).
Furthermore, the public needs to begin building family financial resilience. He emphasised the importance of allocating emergency funds and managing expenditures during periods of economic turbulence. “In a situation where the rupiah is weakening, the public should increase savings, reduce consumer debt, and be more cautious when using credit facilities. Many families are currently vulnerable because expenditures exceed income, while the prices of basic necessities continue to rise,” he said.
Nevertheless, the weakening of the rupiah brings other impacts, namely opening new economic opportunities as local products and the tourism sector become more competitive because costs in Indonesia are relatively cheaper for foreign tourists. To this end, he noted that the public can capitalise on this condition by strengthening local-based businesses, the creative economy, culinary arts, crafts, and digital services.
“In Bali, for example, when foreign tourists increase due to a favourable exchange rate, local MSMEs experience a positive impact through increased sales and the circulation of the people’s economy,” he said.
He also expressed hope that the public should not panic excessively regarding the rupiah’s weakness, as such behaviour could worsen economic conditions through consumptive and speculative actions. “What is needed is an adaptive, thrifty, and productive attitude, as well as improving skills to remain resilient amidst global economic changes,” Raka Suardana added.
Previously, the rupiah exchange rate faced renewed pressure, hitting the level of Rp17,926 per US dollar on Wednesday. Money market observer Ibrahim Assuaibi assessed that the rupiah’s weakness was triggered by increasing geopolitical tensions in the Middle East, which have driven up global oil prices and strengthened the US dollar.