Rupiah Weakness Drives Up Production Costs, BI Central Java: Businesses Remain Optimistic

The Deputy Head of the Bank Indonesia (BI) Representative Office for Central Java Province, Andi Riena Sari, acknowledged that businesses, particularly in Central Java, are facing pressure on production costs due to the weakening of the rupiah against the US dollar. This is especially felt by those whose raw material supplies depend on imports. “Indeed, the point is they (businesses) are facing pressure related to costs or raw materials that may be increasingly expensive because some are still imported. So, regarding this rupiah depreciation, the impact is more on the increase in production costs,” Riena said in Semarang on Friday (26/6/2026). However, she stated that so far, BI’s outlook for 2026 still shows an improving trend. “Because businesses, including consumers, based on our survey results, are still optimistic. And actually, our task here is to manage that expectation,” she said. According to Riena, optimistic expectations need to be supported. “Because if we start from a pessimistic point, it means we are somewhat reluctant to do anything,” she said. “But if we are still optimistic, hopefully, we can move together to make that optimism more real,” Riena added. She also briefly commented on several recent student demonstrations in front of the BI Central Java office. “The essence of this demonstration is actually that they want to get an update on what the actual conditions are like,” she said. According to Riena, the demonstrating students questioned BI’s transparency regarding economic conditions. “It seems maybe they have never accessed Bank Indonesia’s Instagram and website. Because actually, all information has been updated by us through the communication channels that have been provided,” she said.