Retail Boss Admits Prices Have Risen 5-10% Due to Strong Dollar

Jakarta, CNBC Indonesia - Chairman of the Indonesian Shopping Centre Tenants and Retailers Association (Hippindo), Budihardjo Iduansjah, has acknowledged that the prices of a number of goods, particularly imported products, have increased recently. The weakening of the rupiah exchange rate against the US dollar is one of the main factors driving this price hike. He stated that the price increases have actually been occurring for the past one to two months, so it is not a new phenomenon that will only happen in the fourth quarter of this year. “We have already raised prices since yesterday, so to speak. So actually, in the fourth quarter of 2026, if the dollar weakens, we will certainly follow suit,” Budihardjo said when met at the Coordinating Ministry for Economic Affairs office in Jakarta on Thursday (6/8/2026). He mentioned that the increase mainly applies to imported goods affected by the depreciation of the rupiah exchange rate. Budihardjo revealed that the magnitude of the price increase is in the range of 5% to 10%. “Yes, 5% to 10%,” he stated. However, Hippindo believes that what businesses need most is not a specific exchange rate level, but rather exchange rate stability so that companies can calculate selling prices with more certainty. “Actually, whether it’s the dollar or the rupiah, the most important thing is stability, not fluctuating up and down. So if it’s stable, whatever the rate, we can calculate the selling price. What we really hope for is exchange rate stability. But if it does go up, we have already been experiencing increases, and indeed prices must rise if we are buying imported goods. However, with efficiency and by leveraging current technological developments, we will also try to suppress these price increases,” he explained. On the other hand, Budihardjo admitted that this condition is also putting pressure on retail business profits. According to him, although sales turnover is still increasing, company profits are being eroded because various costs are rising, while businesses are trying to hold back price increases through discounts and efficiency measures. “Turnover is up, but indeed there is a decline in profit. So, there is a strategy to boost sales by suppressing profit. With discounts, our profits automatically decrease. This is actually one of the ways to maintain sales,” he said. He added that the weakening of the rupiah also erodes company profit margins because businesses are trying to keep selling prices from rising too high for consumers. “Because the current problem is costs and the increase in the dollar. The weakening rupiah also erodes our profits, because we are trying to stabilise prices, that’s how it is,” he concluded.