Jokowi Angry! Rupiah Drops Dollar Rises, RI Don't Blame USA Mulu
RI Don't Blame the US for the Rupiah Problem, Please Think About It!
- The Rupiah is increasingly under pressure, overshadowed by the United States (US) dollar. The rupiah exchange rate opened lower against the United States dollar after Bank Indonesia maintained interest rates.
Quoting Refinitiv data, the rupiah on Friday (21/6/2024) opened at IDR 16,440 against the US dollar, weakening 0.09%. This position is the worst since the Covid-19 pandemic era which occurred about four years ago.
President Joko Widodo summoned the Financial System Stability Committee (KSSK), namely Minister of Finance Sri Mulyani Indrawati, Governor of Bank Indonesia Perry Warjiyo, Chairman of the LPS Board of Commissioners Purbaya Yudhi Sadewa, and Chairman of the OJK Board of Commissioners Mahendra Siregar, to the State Palace, Jakarta, yesterday(20/9/2024).
This meeting discussed steps to stabilize the rupiah, whose exchange rate against the United States (US) dollar had flown to a level above Rp. 16,400.
To the President, Sri Mulyani explained that the pressure on the rupiah in the last few days was actually caused by global factors, such as the strength of the US economy which means that its central bank is suspected by many market players that it will still be difficult to reduce the benchmark Fed Funds Rate.
Apart from that, there are differences in the direction of interest rates in developed countries because the European central bank is now actually lowering its benchmark interest rate. Meanwhile, Indonesia's economic fundamentals are considered quite good.
BI Governor Perry Warjiyo has explained to President Jokowi that the weakening that occurred in the last few days to move above IDR 16,400 was largely triggered by short-term sentiment factors, not due to the fundamental factors that formed it. Because, he emphasized that if we look at fundamental factors, the rupiah should strengthen.
In the midst of these conditions, there are several things we can do to maintain the rupiah exchange rate quoted from the Financial Services Authority (OJK).
1. Buy Local Products
Increasing the value of the rupiah can be done by shopping or consuming domestic products ranging from clothes, shoes, to household appliances.
By reducing the amount of imports and switching to domestic products, the need for US dollars as a means of payment, especially for consumer goods, will decrease. The dollar supply is not depleted for consumptive matters.
Furthermore, by shopping for local products, Small, Micro and Medium Enterprises (MSMEs) will also grow and develop. When the MSME sector improves, Indonesia's economic growth will also receive fresh air.
Unfortunately, Indonesia still relies on imports for raw materials and consumption, even food. Data from the Central Statistics Agency (BPS) shows that imports of consumer goods in January-May 2024 reached US$ 8.65 billion or an increase of 9.5%. Some of the imported consumer goods are soybeans, wheat and garlic.
1. Invest Domestically
Helping the government in maintaining the economy can be done by purchasing investment instruments issued, such as Government Securities (SBN). The more Indonesian citizens who buy SUN, the Indonesian financial market will not be easily shaken by external shocks because the risk of a sudden reversal in the SBN market can be reduced. Foreign funds do not come and go easily so the rupiah has stronger fundamentals.
For example, this month the government has just issued retail securities in the form of retail savings bonds, namely the SBR013T2 and SBR013T4 series. People who buy this will enjoy higher profits from deposits in banking.
The yield offered will be above the Bank Indonesia reference interest rate or BI Rate, with the potential for an increase if the BI Rate rises, but if the BI Rate falls it will remain the same because the minimum coupon has been set.
For information, the coupon for SBR013T2 has a tenor of 2 years with a yield or coupon offered of 6.45% and SBR013T4 6.60%. The type of coupon is floating with a minimum coupon level (floating with floor).
3. Don't hoard dollars and exchange them for Rupiah
People who have more financial capabilities usually save dollars as part of their financial portfolio. Dollars are used as part of investment diversification. However, as citizens, the weakening rupiah can be a momentum for us to play a role in saving the nation's economy by exchanging your dollar savings into rupiah.
4. Entrepreneurship with Export Orientation
The weakening of the rupiah is a moment to boost exports, especially if people have dreams of producing products that can penetrate international markets.
One example of a business that you can pursue is handicrafts, where authentic Indonesian handicrafts are widely known abroad. The falling Rupiah exchange rate makes the prices of Indonesian export products relatively cheaper compared to products from other countries. By exporting your products, people can help the government in collecting foreign exchange.
5. Travel and Enjoy Domestic Tourism
Another effort is to first restrain the desire to travel abroad and encourage the development of the domestic tourism sector which is expected to accelerate foreign exchange earnings. People can choose tourist destinations within the country.
6. Travel by Public Transportation
It turns out there is a connection between the use of public transportation and the Rupiah currency. The use of public transportation is very effective in saving fuel consumption. If you save on fuel use, the amount of fuel that the government has to import can be reduced so that foreign exchange reserves can be used for other policies. This method is the simplest way to help the rupiah exchange rate.
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