Rupiah Exchange Rate Reaches IDR 15,000 Per US Dollar, Economist: Just the Beginning

JAKARTA, KOMPAS.com – The exchange rate or the rupiah exchange rate weakened against the US dollar in the spot market, even reaching the level of Rp. 15,000 per US dollar.

Citing data Bloomberg At 13:35 WIB, the rupiah exchange rate was at the level of Rp. 15,014 per US dollar, or down 0.14 percent from yesterday’s closing level of Rp. 14,993 per US dollar.

Center of Economic and Law Studies (CELIOS) economist Bhima Yudhistira said the pressure on the rupiah exchange rate was just the beginning of a series of global pressures on the Indonesian economy.

“The weakening of the rupiah exchange rate is just the beginning, the next pressure will occur when the Fed rate increases,” said Bhima to Kompas.com, Wednesday (6/7/2022).

Also read: The Cause of the Weakening of the Rupiah Exchange Rate to Translucent IDR 15,000 Per US Dollar

He explained that currently the condition of the world money market is worried due to the signal of a global economic recession. One of them, Citigroup’s projection which states the risk of the world experiencing a recession is now at 50 percent in the next 18 months.

At the same time, Bank Indonesia (BI) is still holding its benchmark interest rate despite an increase in inflation in June 2022 of 4.35 percent.

BI’s policy has actually made the flow of foreign investment out of Indonesia increasingly heavy.

“We have to prepare ourselves in the worst case scenario,” he said.

Also read: JCI Drops 1.1 Percent, Rupiah Weakens to IDR 15,026 Per US Dollar

He said Indonesia must be prepared to face a contraction in people’s purchasing power if the government does not take a stand to deal with rising inflation.

Then, income from commodity exports that have been supporting the trade surplus could reverse direction, considering that CPO and coal prices began to decline in the past month.

In addition, the deficit in the State Revenue and Expenditure Budget (APBN) has the potential to widen so that the burden on debt interest payments, especially Government Securities (SBN) will increase sharply.

“The condition of the rupiah needs to be a concern because the weakening of the rupiah can trigger various negative excesses to the economy perfect storm or a perfect storm is lurking in the Indonesian economy,” said Bhima.

Also read: Want to Exchange US Dollars Today? First Check the Rupiah Exchange Rate at BRI to CIMB Niaga

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