Kenapa Rupiah Melemah? (Explained)

Summary

The video explains the weakening of the Indonesian Rupiah, drawing connections to the global economic impact of US policies. After the 2008 financial crisis, the US used Quantitative Easing (QE) to stimulate its economy, which boosted the US dollar and attracted investment into developing countries like Indonesia. However, as the US started tapering this stimulus, many investors pulled out, leading to a stronger dollar and weaker currencies in developing nations. Indonesia's weakening Rupiah is also linked to falling demand for its key exports and a worsening balance of trade, a situation shared by many countries worldwide.

Takeaways

• 😀 The Indonesian Rupiah is currently facing its worst performance since 1998, causing widespread concern.
• 😀 The primary cause of the Rupiah's decline is the strengthening of the US economy and the US dollar.
• 😀 The US dollar's strengthening can be traced back to the 2008 financial crisis and subsequent policies aimed at revitalizing the US economy.
• 😀 Quantitative Easing was one of the key policies used by the US to inject stimulus into its economy after the 2008 crisis.
• 😀 After the US economy improved, the US implemented 'Tapering off,' reducing stimulus funds and causing many investors to pull money out of emerging markets, including Indonesia.
• 😀 The reduction in US stimulus funds led to a stronger dollar, which put pressure on developing countries' currencies, including the Rupiah.
• 😀 Indonesia's top export commodities, such as coal, coconut oil, and rubber, have seen reduced demand, contributing to the nation's economic difficulties.
• 😀 The decline in exports and rising imports have caused Indonesia's balance of trade to fail for three consecutive years.
• 😀 The strengthening of the US dollar, combined with a failing balance of trade, has significantly weakened the Rupiah.
• 😀 The video emphasizes that the situation is not solely the fault of local businesses (like meatball sellers), and is a result of global economic trends and policies.

Q & A

What is the current situation with the Indonesian Rupiah?

The Indonesian Rupiah is at its worst performance since 1998, experiencing significant depreciation.

What has caused the Rupiah to fall in value?

The primary cause of the Rupiah's fall is the strengthening of the US dollar, which was a result of US economic recovery policies following the 2008 financial crisis.

Is the fall of the Rupiah linked to domestic issues in Indonesia?

While there are domestic factors, such as rising prices for everyday goods like meatballs, the main cause of the Rupiah's fall is external—specifically the strength of the US dollar and the global economic situation.

What role did the US financial crisis of 2008 play in the current situation?

The 2008 US financial crisis prompted the US to implement a policy known as 'Quantitative Easing,' which injected stimulus funds into the economy, strengthening the US dollar and influencing global currencies, including the Rupiah.

What is 'Quantitative Easing' and how did it affect the Rupiah?

'Quantitative Easing' was a policy where the US injected stimulus money into its economy to recover from the 2008 crisis. This increased global investments in developing countries like Indonesia, which temporarily supported the Rupiah's value.

What happened after the US introduced the 'Tapering off' policy?

After the US cut back on the stimulus funds through 'Tapering off,' many investors returned to the US, leading to a decrease in foreign investment in Indonesia and a stronger US dollar, which further pressured the Rupiah.

How did the strength of the US dollar impact developing countries like Indonesia?

The stronger US dollar made it harder for developing countries' currencies, including the Rupiah, to maintain value. This also led to a reduction in foreign investment and a decrease in demand for exports from countries like Indonesia.

What is Indonesia's balance of trade, and how has it been affected?

Indonesia's balance of trade has been negative for over three consecutive years, with sluggish exports and increasing imports. This is partly due to the stronger US dollar and decreased demand for Indonesia's key export commodities.

What role did China’s economic slowdown play in the Rupiah’s depreciation?

China’s economic slowdown contributed to the global decrease in demand for commodities like coal, coconut oil, and rubber, which are major exports for Indonesia, thus negatively impacting the Rupiah.

Is the current economic situation unique to Indonesia?

No, the situation is not unique to Indonesia. Many other developing countries are facing similar challenges with their currencies due to the strengthening US dollar and global economic factors.