The Indonesian rupiah exchange rate has been strengthening in recent weeks, which affects export and import activities. The Center of Reform on Economics (CORE) Indonesia believes that both short-term and long-term measures are needed to address exchange rate fluctuations, particularly by deepening the domestic financial market to maintain exchange rate stability. In the short term, the government and Bank Indonesia (BI) need to monitor the exchange rate equilibrium point, and intervene in the foreign exchange market if it deviates significantly from the target. Meanwhile, in the long term, deepening the financial market is necessary to make it more stable and less vulnerable to capital flows.
The movement of the rupiah also affects imported raw materials, especially for the manufacturing industry. Industries that sell products abroad will adjust their prices according to the rupiah's value, while those that have a market share in the country will adjust the production cost prices. Experts predict that the strengthening of the rupiah will have a relatively equal impact on all commodities, with the effects of the exchange rate movement already being felt in April 2023.
