Video: The Effects of Rising Interest Rates and Rupiah Volatility on the Leasing Business

Jakarta, CNBC Indonesia - The increase in Bank Indonesia’s benchmark interest rate and the weakening of the Rupiah exchange rate are key concerns for the Indonesian financing industry. Chairman of the Indonesian Financing Association (APPI), Suwandi Wiratno, stated that these conditions will lead to a rise in the cost of imported goods, consequently pushing up the instalments that debtors must bear. Among the three types of financing that constitute the multifinance business—investment financing, working capital financing, and multipurpose financing—it is the investment financing segment that is currently experiencing a decline due to the present volatility. Investment financing directed at the mining and plantation sectors is facing obstacles related to production policies, specifically the mining Work Plan and Budget (RKAB).