The Rupiah traded in the range of IDR 15,730 - IDR 15,690 per US dollar in yesterday's trading, Wednesday (11/10/2023). Even though it closed higher at Rp. 15,690/US$, the rupiah has experienced pressure in the last 5 months. Economists in Indonesia warn that the weakening of the rupiah exchange rate against the United States (US) dollar risks affecting consumption and people's purchasing power. This may occur due to the effects of imported inflation arising from rising prices of imported goods, including fuel and food. Chief Economist of Bank Syariah Indonesia Banjaran Surya Indrastomo revealed that there are two imported goods which are the main commodities for the Indonesian people, namely crude oil or petroleum which is the raw material for fuel oil (BBM), and rice.

"There is pressure on the prices of imported goods for Indonesia's two main commodities, namely crude oil and rice prices, which have the potential to suppress inflation. In fact, the need for rice imports is currently high due to reduced national production," said Banjaran, quoted Thursday (12/10/2023).

The weakening of the rupiah will also have a negative impact on the performance of business actors who depend on imported raw materials, such as the pharmaceutical or petrochemical industry, food and beverages, and textiles. Automatic increases in the prices of these goods are inevitable.

"The weakening of the rupiah will be affected, namely sectors that rely on imported raw materials such as Food and Beverages, especially those with a lot of imported raw materials such as Wheat, Sugar and Soybeans, then the Pharmaceutical, Electronic and Electrical Goods, and Textile sectors," said Permata's Chief Economist Josua Pardede Bank.

Former Minister of Finance in the era of President SBY M. Chatib Basri reminded the government of the urgency to speed up spending.

"El Nino is a serious problem for Indonesia, the increase in rice prices must be anticipated. The increase in rice prices has a significant impact on poor and vulnerable groups," he said.

Chatib believes that if rice prices continue to rise, and world supplies are limited, subsidies need to be provided for vulnerable groups.

Apart from that, he hopes that there will be an expansion of BLT, PKH and social protection coverage.

"Fiscal priorities are very important. Government spending needs to be directed to help the lower middle and vulnerable groups," he said.