The Exchange Rate Against The Dollar To Weaken

Dollar to Euro Exchange Rates currently in the spotlight for the community and economic experts . The weakness of the exchange rate on the U.S. dollar can withstand rated current rate of development of the national economy , it is necessary due to the high costs incurred for the purposes of import of raw materials before the month of Ramadan .
Some people in the Asia -Pacific Economic Economic & Market Analysis , Research Helmi Arman City in research published today , Tuesday ( 30/07/2013 ) explains that the increase in the Cost of import risk can negatively on the development of today's economy .
Subject is because some of the raw materials for the average - average in the Indonesian industry met from imports , such as the withdrawal of fuel and material non - fuel industry .
One effect of the weakening rupiah tighter regulation of credit cards . As is well known , the development of the credit will show a slowing economy , following a contraction berlangsungya . In addition, inflation and the value of the Rupiah reach a record high point , it could force banks to reduce credit card portfolio .
Some media are also highlighting this issue . One of these issues is also of foreign currency debt .
" Debt currency by some corporations are now also in the spotlight due to the weakening of the rupiah , although from our study do about it does not happen until at dangerous levels , " he said
For real sector actors , weakening rupiah will choke margins in the manufacturing sector . BPS 2011 , City Research identifies that the performance of the sector is quite vulnerable to the weakening of the exchange rate . Subject is because manufacturing is dependent on imports of raw materials by exporters , as well as the current export market is arguably low .
The export market is currently dominated most industry groups are counted in armor , chemical , and pharmaceutical manufacturing . But there are also industries that have low import or commonly called lob import content, but some large export can benefit from a weakening currency , such as palm oil , paper , and furniture manufacturing .

RESPOND :

factors that lead to high supply and low demand for Dollar , is Indonesia's trade balance deficit , exports less than imports . Indonesia's trade deficit for 2014 is expected to remain major writer in the non -oil sector , while the oil and gas sector leading commodities such as palm oil , for example still provide a surplus value .

Why is this ? , As entrepreneurs we have made ​​a huge contract in 2014 against imports of raw materials ( particularly to China ) which will be used to meet the domestic demand . The root of the problem is what makes the weak Euro , because highly dependent on imports , should change the nation's culture be superior , the nation's self-sufficiency in all fields . With a wealth of natural and human potential we should be able to .

On the basis of these factors so that the import is using the world's major currencies ( eg dollars ) will raise its bid for the importer country's currency , as in imports , currency exchange usually occurs with the importing country of origin country's currency . Because during 2013, the Indonesian imports greater than exports , the situation has weakened the rupiah . This year due to the weakening effect of last year ( 2013) when the Dollar trend is slowly weakened due to the influence of the global economy , which will be affected are the prices of imported commodities , both raw and capital goods ybahan .

Prices of imported commodities currencies pegged to the country of origin , generally dollar , so if the value of the destination country currency weakens, the price of imported commodities automatically rise . Her simple example , when the rupiah fell by 10 % from 1 U.S. dollar = 12,000 rupiah to 1 U.S. dollar = 13,200 rupiah , the price of an imported commodity was directly proportional to an increase of 10 % . Commodity whose price will go up $ 1 million 100 thousand to Rp1 , 10 million .

The weakening of the rupiah has not only resulted in increased prices of imported commodities , but also of foreign debt , because the debt is clearly defined with foreign currency and there are still uninsured ( hedge ) . If the rupiah exchange rate is directly proportional to the weak U.S. dollar by 10 % , then the value of the Euro debt specified in the U.S. dollar will also increase by 10 %.