The exchange rate of the US dollar against the rupiah, which has continued to strengthen in recent times, has not yet had a significant impact on the textile and textile product (TPT) industry sector. In fact, the rupiah had slumped to Rp15,600 per US dollar, and is now moving in the range of Rp15,576 per US dollar. Even so, textile entrepreneurs admitted that there was no significant effect caused by the weakening of the rupiah. The reason is that the current conditions in the industrial sector are also not normal so that other attacks are considered not to add too much burden.

"Under normal conditions it is indeed challenging, but with current conditions it doesn't have much effect," said the Chairperson of the Indonesian Filament Yarn and Fiber Producers Association (APSyFI) Redma Gita Wirawasta, Monday (10/24/2022).

Currently, he added, domestic garment and textile industry players are reducing production by 30-50 percent, due to the proliferation of imported products. In addition, export demand also tends to decline.

"Right now, many have stopped production because demand is not as much as before, not only locally but also from exports," said Redma.

When demand rises again, the strengthening of the US dollar will be felt. Moreover, the Fed is very aggressive in raising interest rates. So far this year, the increase is 300 basis points, to 3-3.25% and will continue.

In November, the US central bank is expected to raise another 75 basis points to 3.75-4%. It's not enough to stop there, the increase will continue until early next year.

Based on data from the CME Group's FedWatch tool, the market sees the Fed's interest rate at 4.75-5% in February 2023.