Breaching IDR 14,000, Businessmen need Rupiah to be Stable

KATADATA ? Rupiah exchange rate has breached IDR 14,000 per US dollar. Businessmen ask Bank Indonesia (BI) and the government to keep the rupiah stable. The fluctuations of rupiah exchange rate have made them hard to predict their investments in the days ahead.

In today?s trade, based on Bloomberg?s data, rupiah is sold in the range of IDR 13,997 to IDR 14,053 per US dollar. Rupiah has been in the position of IDR 14,047 per US dollar at 9.45 a.m. Western Indonesian Time.

The Chairman of Indonesian Entrepreneur Association (Apindo), Haryadi Sukamdani, said that the rupiah fluctuations have made the production cost to increase and it affects the people?s consumption ability. Even though there is nothing that the businessmen could do at the moment, Haryadi hoped so that the government may release a policy to keep the rupiah stable.

?Like seriously applying the L/C mandatory regulation for primary commodities export, so that the fund from the export could be gained by the country,? said Haryadi when Katadata contacted him, Monday (24/8).

For businessmen, it is hard to predict rupiah?s number in the future since it is affected by the uncertain global situation. If the uncertainty still continues, then the drop in investments and productions would keep on happening even until 2016.

?It?s hard if we want to talk about the numbers. All sales are dropping. It?s hard to predict it in situation like this. And even more so with Malaysian political problems, that would also affect us,? said Haryadi.

The Indonesian Textile Association (API) Chairman, Ade Sudrajat, said that China?s decision to devaluate her currency has made the textile industry to be very competitive with the products from China. The concern is not on the export market, but on the possibility when China increases her expansion to Indonesia after the devaluation of the currency.

?Import in the industry is a normal thing, a value chain, seeking the cheapest. It?s not a problem as long as the purpose is export,? said Ade. ?The problem is if China seeks to be all over the Indonesian market. What steps can we take without the government?s help? Closing it all (companies) down.?

The same thing also being said by the Vice President of the Real Estate Indonesia (REI) Theresia Rustandi, that the volatility of rupiah has also made it difficult for property industry, especially in the construction component cost and the building materials; and even more so since 30% of basic materials for skyscrapers and high buildings are imported. And due to rupiah fluctuations, contractors could not predict the cost accurately.

?We hope (rupiah won?t be above IDR 14,000 per US dollar). Stability is important. The industry is hard to develop if there are many surprises,? said Theresia.

And according to an economist from Indonesia University (UI), Anton Gunawan, as long as the rupiah depreciation is unpredictable, the businessmen would have a hard time to decide policies, especially to prevent a loss due to exchange rate difference. He hoped that BI would keep the rupiah?s movement so that it would not get too volatile.

?In business there must be some adjustments, following the condition that become the concern of everyone, including the exchange rate. There must be some attempts, not just sitting here quietly,? said Anton.

According to Anton, the main thing that the government can do is to keep the people?s consumption ability to stay stable and not crumbling, because the household consumption is predicted to still be the main booster for the economic growth. And meanwhile amid the uncertain global economic condition, repairing the economy has become a positive sentiment so that rupiah can be strong again.