The Paradox of the Rising Dollar
The Rupiah has breached the Rp18,000 mark per US dollar, a development widely reported by international media. Even private WhatsApp groups have suddenly transformed; places once reserved for sharing photos of grandchildren, herbal recipes, and religious invitations have abruptly turned into makeshift IMF branches. Everyone has become an analyst, and everyone has a theory.
Some blame the government, others point to the oligarchy, and some hold foreign speculators responsible. There are even those convinced that the weakening Rupiah is part of a silent global economic war playing out behind the scenes, while others engage in political speculation, suggesting the Finance Minister may soon be replaced.
Amidst this turmoil, a single figure emerges that causes many to furrow their brows. Various surveys indicate that public confidence in the Prabowo-Gibran administration remains around 74 per cent. This is where the paradox lies. The market appears anxious and the Rupiah is weakening, yet public trust, as revealed by Poltracking, remains high. It is akin to observing a dark, heavy sky while the passengers on a ship sit calmly, enjoying their coffee.
Some immediately assume the survey must be incorrect, while others dismiss the weakening Rupiah as insignificant. However, both perspectives may be flawed, as the dollar exchange rate and public confidence are two thermometers measuring different parts of the body. The dollar rate measures market confidence, whereas surveys measure the confidence of the people. While they often move in tandem, they do not always hold hands; sometimes they walk the same path, and sometimes they move in opposite directions.
The market is an anxious creature, much like a wild bird that takes flight at the mere sound of a snapping twig. Investors do not wait for a house to collapse; they move as soon as they smell smoke. Consequently, the market often reacts to what might happen tomorrow. The people, however, are different. They tend to judge based on what is happening today: the price of rice, whether roads are being built, the availability of jobs, and whether children can attend school. The people judge from their kitchens, while the market judges from computer monitors. Therefore, it is not strange that the dollar exchange rate and public satisfaction levels occasionally move in different directions. One is busy reading the weather forecast, while the other is busy checking the contents of the granary.