The regional administrators Export Association of Indonesia attended the central committee meeting of a routine evaluation, Friday afternoon two weeks ago. In the Indonesian Textile Association Secretariat office, Adi Graha Building, Jalan Gatot Subroto, Jakarta, the businessman was discussing an important agenda: the impact of the appreciation of rupiah.
In the last six months, the rupiah continues to strengthen against the U.S. dollar. Since early January until early August, the rupiah had strengthened to Rp 435, or about five per cent, penetrating Rp8.900 level. This is not a trivial matter for exporters as well as importers. "For us, the level below Rp9.000 per dollar is vulnerable," said Chairman of the Association of Export Benny Soetrisno told Tempo in Jakarta last week.
Export value decreased by entrepreneurs because of the rupiah against the dollar jumped sharply. In fact, when they buy imported raw materials, most Rp9.100-9200 exchange rate per dollar. The businessman was threatened overdrawn. Sharp strengthening rupiah, said Benny, also potentially reducing the competitiveness of exporters, because their products relatively more expensive than similar products from other countries.
Steel and textile entrepreneur most complaining. According to the Secretary General of the Association of Export Toto Dirgantoro, entrepreneurs two sectors are at risk of losing revenue five percent due to sharply higher rupiah. "We can not recommend them to hedge (hedging) because the cost is too expensive," he said.
According to Chief Economist, Bank Danamon Anton Gunawan, kedigdayaan rupiah was not free from foreign investors to assess the perception of the Indonesian economy with economic growth of 5.9 percent. Indonesia risks diminishing returns with an indication of low credit-default swaps currently approaching 200 from the original 900s.
Indonesia has also ranked near worth the investment. As a result, foreign investors' funds flow into the stock market, Government Securities, and Bank Indonesia Certificate is very heavy. During July alone, foreign money coming into here to reach Rp13-14 trillion. "That's what makes rupiah to have strengthened," he said.
Based on the calculation of real effective exchange rate that takes into account domestic inflation and currency trading partner of Indonesia, since January 2010 until last July, the index of real rupiah has approached 90-85. "Index below 100 shows the rupiah is strong enough and could reduce the competitiveness of the national export products," said Anton.
Rupiah, which increasingly makes the Ministry of Finance muscular discomfort. Finance Minister said Agus Martowardojo too strong appreciation of the rupiah could not make Indonesia more competitive. "But we believe that strengthening is only temporary," he said. Tempo source in the Ministry of Finance revealed the government intensified coordination with Bank Indonesia to discuss the strengthening of the rupiah. Government alarmed because the average exchange rate since the beginning of the year until today was under the assumption that the State Budget in 2010 amounted to Rp9.200 per U.S. dollar. "In terms of foreign debt repayment burden is indeed good, but exports battered," Agus said the Minister. Whereas exports is one pillar of state revenue and economic growth.
Acting Head of the Ministry of Finance of fiscal policy Agus Supriyanto said coordination with central banks continue to be done. Reinforcement can save foreign debt payments. But on the other hand could threaten the industrial sector, especially exporters. But, he said, strengthening the rupiah has not been too worried. Based on the simulation of fiscal policy, strengthening the sensitivity of exchange rates on growth was not too big. Any strengthening of one percent of the budget assumptions, gross domestic product decreased only 0.027 percent. "The contribution of exports to growth is also small, less than 10 percent," he said.
Deputy Governor of Bank Indonesia Hartadi A. Sarwono said the central bank will continue to monitor the market and intervene in order not to weaken or strengthen rupiah too quickly, which could cause the market turmoil. "When the churned too quickly, the loss not only exporters but also importers," he said.
In the last six months, the rupiah continues to strengthen against the U.S. dollar. Since early January until early August, the rupiah had strengthened to Rp 435, or about five per cent, penetrating Rp8.900 level. This is not a trivial matter for exporters as well as importers. "For us, the level below Rp9.000 per dollar is vulnerable," said Chairman of the Association of Export Benny Soetrisno told Tempo in Jakarta last week.
Export value decreased by entrepreneurs because of the rupiah against the dollar jumped sharply. In fact, when they buy imported raw materials, most Rp9.100-9200 exchange rate per dollar. The businessman was threatened overdrawn. Sharp strengthening rupiah, said Benny, also potentially reducing the competitiveness of exporters, because their products relatively more expensive than similar products from other countries.
Steel and textile entrepreneur most complaining. According to the Secretary General of the Association of Export Toto Dirgantoro, entrepreneurs two sectors are at risk of losing revenue five percent due to sharply higher rupiah. "We can not recommend them to hedge (hedging) because the cost is too expensive," he said.
According to Chief Economist, Bank Danamon Anton Gunawan, kedigdayaan rupiah was not free from foreign investors to assess the perception of the Indonesian economy with economic growth of 5.9 percent. Indonesia risks diminishing returns with an indication of low credit-default swaps currently approaching 200 from the original 900s.
Indonesia has also ranked near worth the investment. As a result, foreign investors' funds flow into the stock market, Government Securities, and Bank Indonesia Certificate is very heavy. During July alone, foreign money coming into here to reach Rp13-14 trillion. "That's what makes rupiah to have strengthened," he said.
Based on the calculation of real effective exchange rate that takes into account domestic inflation and currency trading partner of Indonesia, since January 2010 until last July, the index of real rupiah has approached 90-85. "Index below 100 shows the rupiah is strong enough and could reduce the competitiveness of the national export products," said Anton.
Rupiah, which increasingly makes the Ministry of Finance muscular discomfort. Finance Minister said Agus Martowardojo too strong appreciation of the rupiah could not make Indonesia more competitive. "But we believe that strengthening is only temporary," he said. Tempo source in the Ministry of Finance revealed the government intensified coordination with Bank Indonesia to discuss the strengthening of the rupiah. Government alarmed because the average exchange rate since the beginning of the year until today was under the assumption that the State Budget in 2010 amounted to Rp9.200 per U.S. dollar. "In terms of foreign debt repayment burden is indeed good, but exports battered," Agus said the Minister. Whereas exports is one pillar of state revenue and economic growth.
Acting Head of the Ministry of Finance of fiscal policy Agus Supriyanto said coordination with central banks continue to be done. Reinforcement can save foreign debt payments. But on the other hand could threaten the industrial sector, especially exporters. But, he said, strengthening the rupiah has not been too worried. Based on the simulation of fiscal policy, strengthening the sensitivity of exchange rates on growth was not too big. Any strengthening of one percent of the budget assumptions, gross domestic product decreased only 0.027 percent. "The contribution of exports to growth is also small, less than 10 percent," he said.
Deputy Governor of Bank Indonesia Hartadi A. Sarwono said the central bank will continue to monitor the market and intervene in order not to weaken or strengthen rupiah too quickly, which could cause the market turmoil. "When the churned too quickly, the loss not only exporters but also importers," he said.
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