Indonesian Industries expect further rupiah drop; expecting more pressure as input costs rise

An employee arranges rupiah banknotes at Bank Mandiri in Jakarta on June 23, 2022. Currencies in South-East Asia and around the world have dropped against the United States dollar this year as the Federal Reserve has hiked rates particularly fast. - Antara via Jakarta Post/ANN

JAKARTA, Oct 9 (Jakarta Post/ANN): The decline in the rupiah’s exchange value has had a mixed impact on Indonesian businesses, with many expecting more pressure as input costs rise, while some stand to gain more revenue from customers paying in United States dollars.

The US Federal Reserve’s aggressive interest rate hikes over the past months have prompted investors to shift to assets denominated in US dollars, leading to capital outflows particularly from emerging markets, and prompting the rupiah – like many other currencies – to weaken against the dollar.