e-Procurement | CCTV PIBC | Webmail | eng English | in Indonesia

Rupiah Weakens, Government Asked Anticipate Increase in Food Prices

Governments are required to anticipate the rise in food prices after the rupiah exchange rate had exceeded IDR 14.000 per US dollar on Monday (24/08). As a country that rely on food imports such as rice and sugar, the drop in the exchange rate will impact on rising prices of basic commodities.

 

 

Banking and finance observer Yanuar Rizky said the government should fix Logistics and Imports Management as an anticipation short-term, if the government wants to do self-sufficiency and alternative energy has to do with incentives.

 

He added that the government should set a target within six months to do the harvest and use of alternative energy. In addition, there should be a consensus between the BI, the President and Parliament to conduct operations in different markets.

 

"The goal of BI to foreign exchange intervention was to prevent inflation, the position of the rupiah is IDR 14.049 if the central bank wants to lose to IDR 13.700, will go down? It's like salting the sea water and back again. Why not granted political consensus president, BI and DPR to perform different operations open market, by providing a cheap dollar for imports of food and energy. So they buy at a low price of these items, "said Yanuar.

 

He added that the government and the central bank should check what caused the rupiah to weaken. Moreover, according to Yanuar, if the short term can be solved government should also set up mid-term alternative by providing appropriate tax incentives for the absorption of jobs, for the alternative energy and food security.

 

Governor of Bank Indonesia Agus Martowardojo requested that exporters to release foreign exchange to prevent pressure on the rupiah against with the US dollar. Rupiah at the market close Monday afternoon through the numbers Rp14.049 per US dollar, the lowest since July 1998.

 

As reported by the media, Agus said the release of foreign exchange is expected to balance spending and demand balance and prevent the rupiah depressed deeper. BI also limit the purchase of foreign exchange 25,000 US dollars from 100,000 US dollars for transactions with no underlying or specific purposes.

 

 

As reported by the media, Agus said the release of foreign exchange is expected to balance spending and demand balance and prevent the rupiah depressed deeper. BI also limit the purchase of foreign exchange 25,000 US dollars from 100,000 US dollars for transactions with no underlying or specific purposes.

 

Responding, the demand for Bank Indonesia to entrepreneurs to release dollars, Yanuar said too normative especially the economy's problems, it can be estimated from the impact of the dollar amount of money in circulation because Indonesia is a country importers. Including for food, such as rice and sugar. (BBC)