US Dollar Rage Again, Beware of Swelling RI’s Foreign Debt!

Jakarta

Dollar AS getting crazier. Many of the country’s currencies were under pressure from Uncle Sam’s money, including the rupiah which had weakened when the US dollar reached Rp. 15,000.

If dollar AS stronger, what impact will the community have?

CELIOS Director Bhima Yudhistira Adhinegara revealed that the actual impact that would be felt from the strengthening of the US dollar was an increase in the price of goods such as electronics, automotive parts to medicines, which are imported raw materials.

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He said that with the increase in the price of raw materials, production costs will increase significantly due to inflation and foreign exchange differences, which make companies that rely on imports for efficiency.

“This efficiency risk will have the potential for a wave of layoffs in the manufacturing industry,” he said when contacted, Wednesday (13/7/2022).

Bhima said that another impact of the weakening of the exchange rate was that it could affect the ability to pay foreign debts of the government and the private sector. He said that the higher the exchange rate, the more it will affect monetary stability because the government has a heavy amount of foreign debt, especially the interest burden on foreign currency debt.

Therefore, if there is a currency mismatch, it will affect economic growth (PE) to the effect on political stability. “As has happened in many countries such as Sri Lanka, Laos and Myanmar. So people now have to refrain from spending. The focus on the rupiah emergency fund is estimated to reach the level of Rp. 16,000 per US dollar,” he added.

PermataBank Chief Economist Josua Pardede explained that in general, especially the general public, basically there is no need to worry about the weakening of the rupiah exchange rate, especially for people whose income and expenses are in rupiah because it does not have a significant impact.

“Furthermore, people who consume local products will not be affected,” he said.

Meanwhile, consumers who consume imported goods (which are often categorized as luxury goods) are expected to have quite an impact on people who tend to be middle to upper class.

“So there is nothing to worry about for the public in general about the weakening of the rupiah. Meanwhile, in terms of business fields which have a high import component while sales are denominated in rupiah, it is estimated that the impact of the weakening of the rupiah exchange rate will be,” he said.

Several domestic sectors that have high import components include: wheat flour industry, jewelry, aircraft and their repair services, electronic goods, and several other industries.

For your information, the current position of External Debt (ULN) as of May 31, 2022, was recorded at IDR 7,002 trillion, equivalent to 38.8% of Indonesia’s gross domestic product (GDP). This debt is dominated by Government Securities (SBN) reaching 88.2% of the total debt.

Watch Videos”Whoops! Rupiah is getting worse, the US dollar is almost Rp. 15,000
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