I

ndustry groups have called on state-owned port operator Pelindo II to set its port rate in rupiah to help boost logistic competitiveness amid the currency'€™s current fluctuation.

Indonesian Logistics Association (ALI) chairman Zaldy Masita said on Friday that Pelindo II, also known as the Indonesia Port Corporation (IPC), should change its port rates from US dollar denomination, as the policy had severely hurt the logistic industry due to the rupiah'€™s depreciation against the greenback.

Zaldy said on Friday that Indonesia was the only ASEAN member that did not use its national currency to determine port rates. Both Pelindo II'€™s terminal handling charge (THC) and cost handling charge (CHC) are payable in US dollars.

'€œOver the past few days the rupiah has weakened. This condition has meant service users have had to pay higher tariffs,'€ Zaldy said.

The rupiah has declined 5.3 percent since the end of March, the worst performer among 24 emerging market currencies tracked by Bloomberg. It breached the 12,000 mark against the US dollar earlier this week and has been trading around that level until now. This has further inflated costs for the logistics industry, which already shoulders higher costs compared to its regional peers.

Coordinating Economic Minister Chairul Tanjung, during his visit to the Tanjung Priok Port in North Jakarta on Thursday, said that Pelindo II would have to cease the use of US dollars in transactions with customers because it was against the law.

If Pelindo II agrees to use the rupiah, it would help to contain the currency'€™s depreciation, he said.

'€œThe choice to use US dollars is not unusual in international ports. However, we have the 2011 Currency Law, which states that all domestic transactions should be in rupiah,'€ Chairul told reporters. '€œThe law should have been applied when it was issued. We will give Pelindo II three months to switch the currency to rupiah.'€

Pelindo II president director RJ Lino said that the company would comply, but the tariff for THC and CHC would remain in US dollar. '€œAll payments will be made using the rupiah, not the US dollar,'€ he added.

Zaldy said that Lino'€™s statement would not change anything, because domestic customers had already paid the rates in rupiah.

'€œWe all currently pay the rates in rupiah. What we want is that the rates are determined in rupiah, so we no longer depend on the US currency and are not affected by the fluctuation of rupiah,'€ Zaldy said.

Indonesian Ship Owners Association (INSA) chairwoman Carmelita Hartoto said that the association supported the minister'€™s plan to force port operators to use the rupiah instead of the US currency in its rates.

'€œWe are already behind other countries, including India and Myanmar, which already use their own currencies in all types of port transactions,'€ Carmelita said in a discussion.