Wed, 11 Aug 2010

Jakarta (ANTARA News) - The appreciation of the rupiah which now has reached Rp8,900 per US dollar is weakening the competitiveness of furniture industry and handicraft products, a furniture businessman said.

Chairman of the Indonesian Handicraft and Furniture Industry Association (Asmindo), Ambar Tjahyono, told the press here on Tuesday that the government should immediately take steps to safeguard domestic industry at home due to the rupiah appreciation.

He said that the government should take a salvaging action and intervene in the handling of the rupiah value.

The euro value against the US currency has been going down but the rupiah continues to appreciate. This causes the euro value against the rupiah to depreciate while in fact furniture`s biggest market is in the euro currency, he said.

Ambar said that at present the markets in Europe such as Italy and Spain were showing a downward trend because they were reluctant to have transactions amid the rupiah`s appreciation.

This conditions have caused the drop in Indonesia`s furniture and handicraft product exports, and threatened the industrial growth at home.

The industrial growth at home showed an increase of 28 percent as June 2010 but if the rupiah continued to appreciate it would cause a drastic drop in the coming several months.

He predicted that if this continued to take place the industry at home would collapse in December 2010.

Ambar said that lays off had been taking place in a number of regions such in Jepara (70,000 persons), Cirebon (40,000) and Yogyakarta (20,000).

He said that the laid off workers could return to work if the export conditions were stable again.(*)