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Rupiah Falls, Turns Out It's Not Because of Iran-Israel Conflict, This Is the Culprit

Rupiah Falls, Turns Out It's Not Because of Iran-Israel Conflict, This Is the Culprit

"Dream - The value of the Indonesian Rupiah has dropped to the level of Rp16,000 per United States Dollar (USD). The depreciation of this exchange rate has been felt even more after Iran retaliated against Israel some time ago."

Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause
Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause

However, it turns out that the decline of the Rupiah is not because of the tension currently happening in the Middle East.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, considers the weakening of the Rupiah currency as a strategy by the United States government (US).

Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause

The reason the central bank of the United States (US), The Federal Reserve (The Fed), intentionally will not lower the benchmark interest rate in the near future. "Once again, maintaining high interest rates is their strategy," said Airlangga quoted from Merdeka.com, Friday, April 19, 2024.

As information, the exchange rate of Rupiah has been continuously weakening since the beginning of the year. Airlangga mentioned that the continuation of the high interest rate trend will benefit the economy of the United States. Considering the increasing interest of investors to switch to US dollar currency instruments.

"Nevertheless, Airlangga asserts that the depreciation of the Rupiah exchange rate is not deeper compared to other countries such as China and Thailand. This condition cannot be separated from the preservation of Indonesia's economic fundamentals."

Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause
Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause

"If compared to peer countries, the dollar index in Indonesia is relatively safer," emphasized Airlangga.

Menko Airlangga reiterates that all elements of the Government have been working together to maintain the national economy.

Rupiah Weakens Turns Out Not Because of Iran-Israel Conflict, This is the Root Cause

"Starting from the implementation of fiscal policies carried out by the Government by optimizing the State Budget and Regional Budget during the handling of Covid-19. This also serves as a shock absorber, until the implementation of monetary policies by Bank Indonesia to stabilize the exchange rate of Rupiah. "So, of course, we must maintain the trust of domestic investors, especially to prevent capital outflow," explained Minister Airlangga."

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