Rupiah Breaks Rp18,000 per US Dollar, Government Explores Barter Trade Option with the Philippines

The government has begun preparing alternative strategies to maintain trade performance amid pressure on the rupiah exchange rate, which has breached the psychological level of Rp18,000 per US dollar. One of the measures being explored is the use of a barter scheme in trade transactions with the Philippines. Trade Minister Budi Santoso revealed that the plan emerged after the government observed the challenges faced by several countries due to the weakening of their respective currencies against the US dollar. Amid these conditions, Indonesia and the Philippines are considered to need to find a more flexible trade mechanism so that export-import activities can continue without being overly dependent on exchange rate fluctuations. “We also have an alternative, for example using barter. On the 12th of April, we will meet with the Philippines, with Filipino entrepreneurs,” said Budi Santoso at the Ministry of Trade office in Central Jakarta. According to Budi, discussions regarding the barter scheme began when he met with a Filipino businessperson during the 48th ASEAN Summit. The entrepreneur is reportedly a long-time importer of products from Indonesia. “When we met one of the entrepreneurs from the Philippines during the ASEAN event, he imports our goods; and because the exchange rate in the Philippines is also not very good at the moment,” he said. The condition of both currencies facing pressure has led both parties to consider transaction alternatives outside conventional US dollar-based payment mechanisms. “So how about we use the barter method. We have already found the payment method and everything; on 12 April we will sign a contract with the buyer,” Budi continued. Despite preparing the barter option, the government assures that Indonesia’s export performance is still showing a positive trend. The weakening of the rupiah is actually considered to provide a distinct advantage for Indonesian products as they become more competitive in the international market. “Now, if we link this to exports, this is actually an opportunity for our exports to get even better,” Budi stated.