Apakah Anda Bahagia bila Rupiah menguat? Saya sih tidak...
Jika Anda Iya, maka wajib baca tulisan ku yang satu ini.
Back to the past, before Asia monetary crisis in 1998, our Rupiah value is settled around Rp 2,500 against US$ 1. But when the crisis come, with many mess and destruction within, everyone shocked with the weakening of Rupiah. It's value suddenly drop from 2,500 to reach it's highest value ever, Rp 16,000/US$ more then six times weaker from it's default states for many years under Soeharto regime.
Still flashing in my memory, every electronic, computer and another high tech shop are worried about their business due to higher price that lead to significant demand drop. Based on that experience we usually think that the when Rupiah weakened it's reflect our national economy in bad condition. If you think with the same way as I mentioned, just like the way I also thinking in the past, then you thought wrong.
Instead...More Lower our rupiah value, mean better for our national economic condition. How can? because it's mean our export capacity will be increased and decrease our import. This condition surely good for our national Balance of Payment and National Reserve (cadangan devisa).
How can lower value of Rupiah can drive our national export?
Now try to imagine, if one exporter company buying raw material in Indonesia, for example for seafood Industry buy Tilapia (nila) Fish from farmer with price Rp 10,000/kg , it's will be valued in dollar :
US$ 1 if our rupiah is undervalue (Rp 10,000/US$), or
US$ 1.05 if our rupiah in strong state as now (Rp 10,500/US$)
And so what with this different price?
Come on guys, it's mean our export product will be cheaper in international market and surely more competitive. This advantage will drive the quantity of product sold in International market when rupiah is undervalue. The opposite explanation can be applied when rupiah is strong.
This is one of the biggest general secret why China can sell with low price everywhere. Beside their low cost labor, their government also played their currency (Yuan/Renminbi) so that undervalued against US Dollar. Based on my explanation about seafood export you can imagine how much they can reduce the price with playing their currency. That's why Barrack Obama always shouted to China to stop playing their currency.... to be continued...
Back to the past, before Asia monetary crisis in 1998, our Rupiah value is settled around Rp 2,500 against US$ 1. But when the crisis come, with many mess and destruction within, everyone shocked with the weakening of Rupiah. It's value suddenly drop from 2,500 to reach it's highest value ever, Rp 16,000/US$ more then six times weaker from it's default states for many years under Soeharto regime.
Still flashing in my memory, every electronic, computer and another high tech shop are worried about their business due to higher price that lead to significant demand drop. Based on that experience we usually think that the when Rupiah weakened it's reflect our national economy in bad condition. If you think with the same way as I mentioned, just like the way I also thinking in the past, then you thought wrong.
Instead...More Lower our rupiah value, mean better for our national economic condition. How can? because it's mean our export capacity will be increased and decrease our import. This condition surely good for our national Balance of Payment and National Reserve (cadangan devisa).
How can lower value of Rupiah can drive our national export?
Now try to imagine, if one exporter company buying raw material in Indonesia, for example for seafood Industry buy Tilapia (nila) Fish from farmer with price Rp 10,000/kg , it's will be valued in dollar :
US$ 1 if our rupiah is undervalue (Rp 10,000/US$), or
US$ 1.05 if our rupiah in strong state as now (Rp 10,500/US$)
And so what with this different price?
Come on guys, it's mean our export product will be cheaper in international market and surely more competitive. This advantage will drive the quantity of product sold in International market when rupiah is undervalue. The opposite explanation can be applied when rupiah is strong.
This is one of the biggest general secret why China can sell with low price everywhere. Beside their low cost labor, their government also played their currency (Yuan/Renminbi) so that undervalued against US Dollar. Based on my explanation about seafood export you can imagine how much they can reduce the price with playing their currency. That's why Barrack Obama always shouted to China to stop playing their currency.... to be continued...
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