Expert Explains Effect of Rupiah Weakening Against Import Prices

TEMPO.CO, Jakarta - Commodity and currency observer Lukman Leong believes that the depreciation of the rupiah exchange rate will impact the increase in import prices. According to him, import prices usually adjust to the exchange rate of the US Dollar against the Rupiah.

"Import prices typically move in line with the US dollar exchange rate. The depreciation of the rupiah will cause imported goods to become more expensive. However, imports from non-US dollar goods may not necessarily rise and may even decrease due to almost all world currencies such as the Euro and the Yen also sharply weakening against the US dollar recently," Lukman told Tempo on Saturday, April 13, 2024.

As of today at 08:30 WIB, the rupiah exchange rate according to Google Finance is at the level of Rp 16,117 per 1 US$. Whereas yesterday at 14:30 WIB, the exchange rate of the rupiah against the US dollar was recorded at Rp 16,147.

Previously, Lukman mentioned that the depreciation of the rupiah was not surprising. This is because the US Dollar Index has been strengthening lately.

"It is not surprising, considering the US dollar has been very strong this past week. Moreover, after the surprising rise in US inflation data, which was above expectations," he said.

According to him, there are almost no positive sentiments that can support the strengthening of the rupiah. For example, data from China this week, where inflation is lower than expected. In addition, trade data also recorded a surplus.

"Exports and imports are also lower than expected, further pressing down the rupiah," said Lukman.

ANNISA FEBIOLA

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