By: Brawijaya*)
Recent weeks, the rupiah conditions increasingly alarming due to continued pressure by the United States dollar (US). The rupiah has reached Rp 14,800 per US dollar, attainment of the worst since the economic crisis of 1998. However, the weakening of the rupiah is not necessarily because of the weakness of the domestic economy but due to global economic pressures that are still rocking.
Chief economist at PT Bank Mandiri (Persero) Tbk (BMRI), Destry Damayanti, the movement of the rupiah against the US dollar will weaken and move in the range of Rp14.500 to Rp14.800 per USD by the end of the year. Destry explained, still weakening of the rupiah is the case for two reasons. First, China is still expected to weaken its currency. In addition, the end of the year is expected to approach the higher demand for US dollars for debt payments due. China deliberately weakening its currency to boost Chinese export sector. This is also done by some other exporting countries. However, the weakening of the rupiah does not trigger Indonesia’s export performance. Because the commodity is a mainstay export continued to decline in prices.
The weakening of the currency is not only felt by the rupiah. Asian currency markets also fell after the weakening manufacturing sector in China until the emergence of negative sentiment on the capital markets global economic conditions. Currently China is the second largest country become an engine of global economic growth. So that the negative sentiment is what drives investors to secure their assets to bring capital back to the country that is considered for safety investment like in US. Some countries that show the weakening of the currency is Australia, South Korea, Malaysia, India, Thailand and Singapore.
The weakening of the rupiah is considered reasonable because it follows golbal economic development. The negative sentiment in the global economy is a major factor weakening of the currency. epala Foreign Exchange Operations Division, Department of Monetary Management BI Rahmatullah currently assessing the main factors that lead to weakening rupiah is, sentiment, not fundamentals. “For example ourselves. When we are healthy suddenly comes a friend who told you sick yes, after that came another friend who also expressed the same thing. Not only that, a few moments later came another group of friends who intend to mourn us. And so on, “said Rahmat. Rahmat said the allusion as described above that is currently being hit Indonesia. There are fears that even more pressing Rupiah depreciated.
Disagree with this negative sentiment, the 3rd President of Indonesia, BJ Habibie give an opinion on the weakening of the rupiah against the US dollar. According to him, currently the most important for the government does not need a lot of thinking about the rupiah weakened against the US dollar. However, the most important is how create jobs as much as possible. Habibie also asked the government to increase the use of domestic goods and reduce imports, so when the dollar strengthens, it will not be affected.
The weakening of the rupiah should not worry excessively on the Indonesian economy. The weakness of the exchange rate is only slowing the pace perekonomia but will not reach crisis point. Even when viewed from the fundamental side, the Indonesian economy is still strong, so it can adjust to the global economic slowdown. If we assume Indonesian economy will be a crisis, then the exchange rate will be in free fall even further than that occurs slowly weakening. Simply weakening rupiah at least be seen as Indonesia preparedness against global economic shocks. The rupiah indirect free fall, which means fundamentally Indonesia’s economy is still strong.
*) The author is economist observer
