'The interest rate hike will send investors away'

To curb the rapid fall of the rupiah against foreign currencies, Bank Indonesia increased its benchmark interest rate, a move that obliges commercial banks to raise their interest rates. The Jakarta Post interviewed residents to get their views on the issue.

Darwanto, 51, works for a private oil company and lives in Ciputat Raya, South Jakarta:

I don't have any objection to the interest rate hike. However, I feel sorry for people who have bank loans. The interest hike definitely puts more of a burden on them.

I believe that the policy is only temporary as we don't want the fluctuating rupiah exchange rate to disrupt the economy.

But, in the long term, the government should do more than increase interest rates to strengthen the currency.

The main thing to do is to revise the law and tighten law enforcement. If there is security, I believe foreign investors will come to Indonesia and the rupiah will stabilize.

Didit Rahmaditya, 35, works at a finance company, and lives in Tebet, South Jakarta:

One thing for is sure: our company will be affected. A lot of companies won't be able to repay bank loans, which in turn will degrade their economic performance, thus putting off potential investors.

However, I believe that the hike is just a short-term policy. I think the government expects people to save instead of taking out loans for consumption.

But this kind of policy would backfire on the government's efforts to lure foreign investors.

Therefore, I suggest the government be more serious in upholding the law and enforcing it; a key factor to convince investors that this country is safe for business.

-- The Jakarta Post