Rupiah Weakens, Vehicle Credit Demand Predicted to Slow

JAKARTA - The weakening of the rupiah exchange rate against the US dollar, which briefly touched Rp17,424 per dollar, is estimated to impact the motor vehicle financing industry. This situation has the potential to suppress public interest in buying new vehicles, especially models that still rely on imported components. OJK’s Head of Executive for the Supervision of Financing Institutions, Venture Capital, and Other Financial Institutions, Agusman, stated that exchange rate fluctuations could trigger vehicle price adjustments, ultimately affecting automotive credit demand. Rising vehicle prices are seen to increase credit instalments. This situation could affect the public’s ability to take on new financing. Not only from the demand side, exchange rate pressure is also considered to influence the risk profiles of financing companies. Therefore, OJK asks multifinance players to strengthen mitigation strategies to maintain financing quality. Agusman assessed that financing companies need to strengthen risk management and continue to apply prudent principles in credit disbursement. “Financing companies need to strengthen risk management, maintain prudent principles in financing disbursement, and adaptively adjust business strategies to maintain a balance between growth and financing quality,” said Agusman. Therefore, financing companies are asked to increase monitoring and risk mitigation steps to anticipate potential problematic credit. Amid these conditions, multifinance companies are expected to be more selective in disbursing vehicle credit to keep portfolio quality healthy. This selective approach is taken to suppress the potential for non-performing financing (NPF) while maintaining the stability of the financing industry amid economic uncertainty.