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Apindo says weaker rupiah 'not conducive'
The employers' association has flagged the rupiah, which reached an all-time low in two years on Friday, cautioning that its weakening rate would adversely impact businesses across a variety of operational aspects.
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A teller (left) serves a customer on April 17, 2024 at a money changer in Jakarta. The rupiah had fallen at the close of trading on June 14 to Rp 16,410 per US dollar, its lowest level since April 1, 2020. (Antara/Sulthony Hasanuddin)
T
he Indonesian Employers Association (Apindo) has said the rupiah's depreciation against the United States dollar made for an unfavorable business climate, after the currency closed last Friday at Rp 16,412 against the greenback, its weakest rate since April 1, 2020.
Compared to the previous day’s figure, the rupiah had weakened by 130 points, or 0.87 percent, and had reached an even lower Rp 16,431 per dollar during intraday trading.
However on June 19, the rupiah was trading stronger at Rp 16,387 when the market reopened after the two-day Idul Adha public holiday from Monday to Tuesday.
"The rate reaching Rp 16,000 has significantly raised the cost of doing business in Indonesia. This situation is not conducive for the growth of domestic industries or exports," Apindo chairwoman Shinta Kamdani said on Monday, as quoted by tempo.co.
She added that the rising costs went beyond higher import burdens and also included higher expenses related to logistics, finances and other operational aspects, which could lead to a decline in performance, greater risks of nonperforming loans (NPLs) and lower capacity.
Shinta also expressed concerns about heightened volatility and financial market speculation, which could further strain Indonesia’s macroeconomic stability.
Entrepreneurs were apprehensive that the rupiah’s continuing depreciation could slow the domestic market and discourage consumers from spending, and Apindo hoped the government would conduct interventions to stabilize and strengthen the rupiah exchange rate.
