Rupiah Drops, Erick Thohir Asks Pertamina To MIND ID Buys US Dollars

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir asked state-owned companies that depend on imported raw materials and SOEs with a large portion of foreign debt (in US dollars) to optimize large purchases of US dollars in a short time.

This appeal was appealed to SOEs such as Pertamina, PLN, Pharmaceutical SOEs, to Mining SOEs, namely MIND ID.

Furthermore, Erick said that SOEs also need to review the operational costs of capital expenditures, debts that will mature, to corporate action plans.

"And (BUMN can) conduct a sensitivity study on principal payments and or interest on debt in the dollar which will mature in the near future," he said in an official statement, Thursday, April 18.

This request was conveyed in order to minimize the impact of economic and geopolitical turmoil due to the recent heated Iran-Israeli conflict. Especially related to the weakening of the rupiah to the level of Rp. 16,000 to Rp. 16,300.

Erick also asked SOEs that have foreign debts or plan to issue instruments in US dollars to review the hedging option to minimize the impact of exchange fluctuations.

"All SOEs are expected to be vigilant and alert by monitoring the current situation, given the possibility of an increase in interest rates in the near future," said Erick.

Mining SOEs Asked To Take Advantage Of The Trend Of Rising Oil Prices

In addition, Erick said export market-oriented SOEs must be able to take advantage of the current trend of rising oil prices.

"Such as MIND ID mining, PTPN plantations can take advantage of this price increase trend to mitigate the erosion of the trade balance," he said.

With various conditions occurring and weakening the rupiah touching at the level of around Rp. 16,000 to Rp. 16,300 per US dollar in the last few days. As a result, Erick projects that the rupiah exchange rate could reach more than Rp. 16,500 per US dollar if geopolitical tension does not decrease.

Erick assessed that the economic and geopolitical situation had already and would have an impact on Indonesia through Foreign Outflow investment funds which would trigger a weakening of the rupiah and rising bond yields. Then also the higher the cost of importing raw materials and food due to supply chain disturbances.

"And it will erode Indonesia's trade balance," said Erick.