'High interest rates only hurt people'

'High interest rates only hurt people'

To curb the rapid fall of the rupiah against foreign currencies,
Bank Indonesia increased the interest rate of its promissory
notes, which prompted commercial banks to raise their interest
rates. The Jakarta Post talks to residents to get their opinion
on the issue.

Midya Nur Wulan Santi, 23, a reporter for a women's magazine
who lives in Kalimalang, East Jakarta.

Though the policy doesn't affect me, I feel sorry for those
who have loans or run businesses. They may have difficulties in
repaying their loans and managing their finances. Hopefully, it
won't force them to close their businesses.

In my opinion, what Bank Indonesia did -- raise the rate --
will only work for a while. I don't think it will effectively
bring the rupiah back to its previous level.

I haven't see any significant change in the rupiah's exchange
rate since the new rate was introduced.

However, maybe the rupiah would be worth less if the
government did nothing.

I don't know what exactly should be done, but I think what the
government should probably do is improve law enforcement, so that
the business climate improves.

I think many investors would invest in Indonesia if the
situation was conducive to business. If this happened, it'd help
bring the rupiah back to its former worth.

Erlangga Aditya, 31, is a broker at the Jakarta Stock
Exchange.

I understand that the policy is necessary to anticipate higher
inflation, but it was introduced a bit late.

It sure does have an impact on people, especially business
entities with large debts. Basically, I don't think the greater
public will feel a significant impact, except for slightly higher
interest on their loans.

It's the government's obligation to pass on the message of the
importance of every policy it makes, including for this one.

People, even businesspeople, must understand that it was
necessary despite the heavier burden it may put on them.

The Jakarta Post