Rupiah Plunges, Apindo Says Burden on Industry and Layoff Risks Increase

JAKARTA, KOMPAS.com - The weakening of the rupiah, which briefly touched Rp17,500 per US dollar, is beginning to worry the business world. Exchange rate pressures are feared to trigger price increases for goods and the threat of layoffs if the situation persists. Chair of the Indonesian Employers Association (Apindo) Shinta Widjaja Kamdani stated that the ongoing rupiah depreciation, creating new all-time lows, is a serious concern for business circles. “This condition affects almost all developing countries, including Indonesia, through exchange rate pressures and increasing capital outflows,” she said when contacted by Kompas.com on Wednesday (13/5/2026). Shinta explained that the rupiah’s weakening directly pressures the business world’s cost structure, especially since the national industry remains heavily reliant on imported raw materials. Around 70% of manufacturing raw materials still come from abroad, while raw materials contribute about 55% to total production costs. “For the business world, we see this situation as an external shock that strengthens pressure on the cost structure and company cash flow,” she said. Under these conditions, the most vulnerable sectors are those with high import dependency, such as petrochemicals, plastics, food and beverages, pharmaceuticals, and energy-based manufacturing. For example, the rise in naphtha prices as the main raw material for the plastics industry has driven resin prices up by tens of percent. “This shows cost-push inflation pressure that is not limited to one sector but has a broad transmission effect across the entire supply chain,” she explained. Not only from the production side, the strengthening of the US dollar also increases the burden of corporate obligations in foreign currency, both interest payments and principal debt. This condition is seen to squeeze company cash flow and increase business risks.