US Dollars are now IDR 15,400, Entrepreneurs don’t care

Jakarta, CNBC Indonesia – The Rupiah is showing a strengthening trend after reaching its highest level this year at IDR 16,445 per US Dollar (June 21, 2024).

Today Wednesday, August 21 2024 (at 1.12 WIB) the Rupiah is moving at IDR 15,434 per US dollar.

So what will be the impact of the strengthening of the Rupiah on entrepreneurs, especially national exporters? Is the US Dollar position around IDR 15,400 ideal?

The General Chairman of the Indonesian Export Entrepreneurs Association (GPEI) Benny Soetrisno said that with this strengthening, entrepreneurs would not enjoy profits. On the other hand, he said, business actors, exporters in this case, will continue to make changes.

“Regardless of (the exchange rate of the Rupiah against the US Dollar), exporters will make adjustments to their production costs. We cannot benefit from the weakening of the US Dollar against the Rupiah,” he told CNBC Indonesia, Wednesday (21st day). /8/2024).

On the other hand, he said, business actors are currently facing the impact of rising costs.

“Income in US Dollars is of course the same, but to cover expenses that are partly in Rupiah. Compared to 2022-2023, this year there will be an increase in expenses of about 5%, ” said Benny.

“Costs that are part of the Rupiah increase regularly every year. These are the costs of employees. In addition, there are domestic logistics costs for land, sea and air, as well as bank interest costs,” said Benny.

For the record, according to Refinitiv, it was observed that the Rupiah had strengthened significantly for 7 consecutive days, or to be precise since July 31, 2024.

In the last trade last week, Friday (9/8/2024), the rupiah closed down 0.19% at IDR 15,920 / US $. This weakness is the first in 7 days.

Despite last weekend’s weakening, the rupiah flew 1.7% in a week. This strengthening extends the positive movement of the rupiah, which also strengthened by almost 0.6% in the previous week.

Notes CNBC Indonesia Research Teamthere are at least 3 main things that will eventually make the rupiah move strongly.

From abroad, especially the US, news of a possible recession emerged at the end of last week. This affected the fall of the US Dollar index (DXY) and became a breath of fresh air for the Rupiah to strengthen again to below the psychological level of IDR 16,000 / US$.

Not only the impact of the US, the carry trade that took place had a major impact on the Japanese yen as well.

And, from the domestic side, market players positively welcomed the release of data from Bank Indonesia (BI) regarding Indonesia’s foreign exchange reserves (cadev) for the period of July 2024.

(dce/dce)

Hundreds of residents queue to exchange new Rupiah denominations at Istora Senayan