The rupiah'€™s sharp fall against the US dollar should be used as an opportunity for local industry to boost its exports, which have been on a downward trend lately due to the global economic slowdown, President Joko '€œJokowi'€ Widodo said.

Jokowi said Wednesday that the country'€™s export-oriented companies should be given incentives to take advantage of the opportunity that comes with the downturn.

'€œWith this kind of opportunity, the industry should be encouraged [...] so that export-oriented industries move faster and can take advantage of the weakening rupiah,'€ the President said in his address at the opening of a limited Cabinet meeting that discussed the government'€™s efforts to cope with the fall of the rupiah and several other economic issues such as the government'€™s strategy to achieve the economic growth target.

Vice President Jusuf Kalla echoed Jokowi'€™s sentiments, saying that the weak rupiah would provide an advantage for export activities in the country, allowing it to better compete in the world market.

'€œIt will bring economic stability because the deficit in the trade and current account will decrease. There will also be positive impact from the fuel subsidy cuts,'€ Kalla told reporters following the meeting. '€œThe result, the economic stability, will be seen early next year.'€

Kalla predicted that the rupiah exchange rate would reach a stable level of Rp 12,500 per dollar early next year, when the reduced fuel subsidy policy would also start to show gains as such funds would be transferred from consumptive to productive areas two months after being introduced.

The rupiah gained 0.2 percent to 12,658 per US dollar on Wednesday after hovering near the 12,900 level a day earlier, local exchange rates published by Bloomberg show. The Indonesian currency fell 1.9 percent Monday, the weakest level since August 1998.

The government hopes that with the government'€™s economic program in place, the rupiah will eventually return to below 12,000 per dollar in the first quarter of next year.

According to Kalla, the weak rupiah could also spur foreign investment into the country.

Finance Minister Bambang Brodjonegoro said the government would provide incentives through tax allowances to boost investment, saying that using this momentum, '€œthese industries that are predicted to be able to boost exports are the ones that will be pushed by giving [them] incentives'€.

'€œ[We will make the tax allowance] easier to get,'€ he said.

Bambang added that the government did not need to carry out measures as a means of intervention.

'€œIntervention will only deplete foreign exchange reserves, it will not help [ease the weakening rupiah],'€ he said.

The meeting also discussed several other issues, including the finalization of the 2015-2019 National Mid-Term Development Plan (RPJMN), the revision of the 2015 government'€™s working plan and the 2015 ministerial budget.

Kalla also suggested that the stable economy next year could serve as the right time to impose a fixed fuel-subsidy scheme.

'€œNext year, when the situation is better and stable, it would be best to impose a fixed subsidy,'€ he said.

Bambang has previously said that such scheme, in which fuel subsidies are fixed at between Rp 1,000 to Rp 2,000 per liter, would safeguard the state budget from fluctuations in the dollar and oil prices that could threaten the state budget.

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