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Apindo Demands BI Intervention to Remedy Plummeting Rupiah Exchange Rate

Translator

Laila Afifa

Editor

Laila Afifa

14 April 2024 22:26 WIB

TEMPO.CO, Jakarta - Chairwoman of the Indonesian Employers' Association (Apindo) Shinta Kamdani, urged the government, particularly Bank Indonesia (BI), the Ministry of Finance, and the Financial Services Authority (OJK), to take several intervention measures to prevent further deterioration of the exchange rate of the rupiah.

According to Shinta, intervention must be carried out as soon as possible to prevent the prolonged impact of the weakening rupiah, which could ultimately trigger an increase in prices of goods and services.

On Sunday afternoon, April 14, 2024, the exchange rate of the rupiah was observed to weaken again. It is now at the level of Rp 16,117 per US dollar.

As reported by Google Finance, before Eid al-Fitr 2024 or Friday, April 5, 2024, the exchange rate of the rupiah was Rp 15,840 per US dollar.

Shinta asserted that the depreciation of the rupiah could affect the business climate and investment in Indonesia. "It could also trigger an increase in business cost inflation as well as market price inflation higher than before," Shinta said in a text message on Sunday, April 14, 2024.

Apindo, according to Shinta, continues to closely monitor the depreciation of the rupiah. If the government and various policymakers do not intervene immediately, the market will be shocked and there could be a massive capital flight from the stock market.

"This could disrupt the current account balance and further worsen the depreciation of the exchange rate," said Shinta.

Meanwhile, Chairman of Apindo Karanganyar, Edy Darmawan, is concerned that the industrial world, which generally has not yet recovered, will further worsen the condition of companies. "The exchange rate reaching Rp 16,000 per US dollar will certainly affect the performance of companies," said Edy.

One of the impacts, according to Edy, will be seen in the performance of companies that are highly dependent on imported raw materials, such as the textile and plastic sectors. "Certainly, they are greatly affected. Especially when entrepreneurs had to pay Eid bonuses amid global and regional trade uncertainties," Edy underlined.

Edy suggested that, besides intervention policies with monetary instruments, the government should also formulate fiscal policies. Among these policies, he said, could be providing incentives to companies severely affected by the depreciation of the rupiah.

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