Rupiah Weakness Opens Opportunities to Boost Local Product Consumption

Jakarta (ANTARA) - The weakening of the rupiah exchange rate against the US dollar is considered a momentum to increase the consumption of local products, following the rise in the price of imported goods in the domestic market.

Economic observer and lecturer at the Faculty of Economics and Business, University of Indonesia (FEB UI), Dr Toto Pranette S.E., M.M., stated that the depreciation of the rupiah makes imported products more expensive, thereby creating greater opportunities for domestic products to compete.

“With the depreciation of the rupiah, the price of imported goods naturally becomes more expensive, so the potential for domestic products to showcase themselves is increasingly open,” said Toto Pranoto when contacted by ANTARA in Jakarta on Wednesday.

Toto believes that the more consistent implementation of Local Content Requirement (TKDN) regulations could serve as an important instrument to strengthen the position of local products in the domestic market.

Nevertheless, he warned that there remain several challenges that need to be addressed to ensure that domestic industries can optimally utilise this momentum.

“The main challenge, of course, relates to how local industries can be protected from smuggled imported goods, which have become very prevalent recently,” he said.

In addition, Toto highlighted the dependency of several business actors, particularly micro, small, and medium enterprises (MSMEs), on imported raw materials.

He added that the government needs to tighten supervision at import entry points to prevent smuggling practices while ensuring that the implementation of TKDN runs effectively.

On the other hand, local producers also need to increase production efficiency, strengthen access to raw material supplies, and build strong brand images to enhance the competitiveness of domestic products.

“Strong company branding could be a determining factor for their competitiveness in the future,” said Toto.