JAKARTA. The Investment Coordinating Board (BKPM) claimed the weakening of the rupiah currency which has reached Rp14,000 per US dollar has not hampered investment.
“We do not see yet the impact of the rupiah depreciation on investment. However, it affects the real sector as demand is likely to drop,” BKPM chief Franky Sibarani said here on Tuesday.
Since the first semester of this year, the rupiah depreciation has no direct impact on the flow of investment. Investors are even trying to take advantage of the rupiah weakening by increasing the performance and their exports.
“Data shows in the first semester of the year that the realization of investment rose by 16.6 percent. The realization of the investment in steel industry even rose by 100 percent in the first semester,” Sibarani said.
He said that amid the weakening of the rupiah, numerous industries even aggressively expanding their business after seeing the opportunity to improve their export performance.
Of the investment projects it is monitoring, BKPM has inspected recently 54 and found that they had export potential worth up to US$3.4 billion.
The BKPM chief said that even though rupiah deprecation can disturb production as it hampers the importation of raw materials and capital goods, yet the realization of investment at home will continue to flow.
“Investment is different from others in the real conditions now. Investment on cement and steel industries are adversely making expansions,” he said.
A number of industries are even encouraged to become more expansive after seeing loopholes in the rupiah depreciation. The projects have the export potential worth up to US$3.4 billion.
“It covers different projects such as those for the production of garment, rubber, fisheries and others,” Sibarani remarked.
Since Monday and Tuesday, the rupiah exchange rate hovered at the Rp14,000 range, far from the Rp12,500 set in the revised state budget this year.
On Tuesday morning, the rupiah exchange rate weakened by 25 points to Rp14,020 per US dollar from Rp13,995.