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The Plunging Rupiah
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bradleycooper



Joined: 12 Apr 2013
Posts: 310

PostPosted: Wed Dec 17, 2014 12:12 pm    Post subject: Reply with quote

http://www.wsj.com/articles/bank-indonesia-steps-up-efforts-to-defend-rupiah-1418734562

The rupiah sank to a 16-year low yesterday, passing 12,900 rupiah to the dollar. The Bank of Indonesia has been intervening today but it has remained near record lows. Indonesia is not in the Russia category of volatility right now, but it is certainly not faring well either. Once the US raises interest rates next year, it may get even uglier.
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EFL Educator



Joined: 17 Jul 2013
Posts: 988
Location: Cape Town

PostPosted: Thu Dec 18, 2014 7:31 am    Post subject: Reply with quote

Blame the plunging rupiah on speculators...the same thing happened in the late 90's in Indonesia....I feel sorry for the Indonesian people as they will suffer from this more than anyone else...not the banks!!!! Shocked Shocked Shocked
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plumpy nut



Joined: 12 Mar 2011
Posts: 1652

PostPosted: Tue Jan 27, 2015 9:59 am    Post subject: Reply with quote

What's with the Rupiah? It hasn't hit 13000 yet.
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Prof.Gringo



Joined: 07 Nov 2006
Posts: 2230
Location: Dang Cong San Viet Nam Quang Vinh Muon Nam!

PostPosted: Sat Jan 31, 2015 6:27 am    Post subject: Reply with quote

plumpy nut wrote:
What's with the Rupiah? It hasn't hit 13000 yet.


I wonder WHY there are so many jobs open in Indo Question

Twisted Evil
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Listerine



Joined: 15 Jun 2014
Posts: 340

PostPosted: Tue Jun 16, 2015 6:14 am    Post subject: Reply with quote

Been hovering around 13,300 to the dollar for the past week or so. The RI government has spent billions of $ in foreign reserves propping it up. Most analysts predict it will drop to between 13,600 and 14,000 in the near future with one Singapore based economist forecasting it might reach an unprecedented 25,000!
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bradleycooper



Joined: 12 Apr 2013
Posts: 310

PostPosted: Thu Jun 18, 2015 10:19 am    Post subject: Reply with quote

Listerine wrote:
Been hovering around 13,300 to the dollar for the past week or so. The RI government has spent billions of $ in foreign reserves propping it up. Most analysts predict it will drop to between 13,600 and 14,000 in the near future with one Singapore based economist forecasting it might reach an unprecedented 25,000!


The rupiah is indeed in a lot of trouble, Listerine. The government spent almost a billion dollars in a single day last week to stop it collapsing. Nonetheless, it has fallen from Rp. 11.500 when Jokowi first won the election to Rp 13.400 today. That's a massive fall, and shows how little faith markets have in this new president.

The finger pointing has already begun. There was a ridiculous article today in Kompas, supposedly the 'leading' Indonesian newspaper, which claimed there is an evil 'George Soros' like figure who was in plotting to bring down the currency. But, in a weird twist, this figure was an Indonesian, described as 'the enemy within.' Who was this evil man? He wasn't even named. This Phantom of the Rupiah is just another bogeyman to try and divert attention from how badly the current president is doing.
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Listerine



Joined: 15 Jun 2014
Posts: 340

PostPosted: Fri Jun 19, 2015 6:12 pm    Post subject: Reply with quote

bradleycooper wrote:
Listerine wrote:
Been hovering around 13,300 to the dollar for the past week or so. The RI government has spent billions of $ in foreign reserves propping it up. Most analysts predict it will drop to between 13,600 and 14,000 in the near future with one Singapore based economist forecasting it might reach an unprecedented 25,000!


The rupiah is indeed in a lot of trouble, Listerine. The government spent almost a billion dollars in a single day last week to stop it collapsing. Nonetheless, it has fallen from Rp. 11.500 when Jokowi first won the election to Rp 13.400 today. That's a massive fall, and shows how little faith markets have in this new president.

The finger pointing has already begun. There was a ridiculous article today in Kompas, supposedly the 'leading' Indonesian newspaper, which claimed there is an evil 'George Soros' like figure who was in plotting to bring down the currency. But, in a weird twist, this figure was an Indonesian, described as 'the enemy within.' Who was this evil man? He wasn't even named. This Phantom of the Rupiah is just another bogeyman to try and divert attention from how badly the current president is doing.


Sounds like the shenanigans of Hashim Djojohadikusumo!

Failing that Tony Abbott seems to be a scapegoat for all of Indonesia's past, present and future woes.

Rolling Eyes
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jaybet3



Joined: 15 Dec 2010
Posts: 138
Location: Indonesia

PostPosted: Sat Jun 20, 2015 9:23 am    Post subject: Reply with quote

Back in Indo after working the past 11 months in Malaysia to find things are worse than when I left. Just rented a house in Solo and found that the water is full of dirt and clogs up the shower and washing machine.

The locals told my wife that PDAM now processes the water locally instead of from out of town like in the past and the water quality is crap. Seems they can build a dozen or more new huge hotels, but home owners are getting the shaft. I'm sure the hotels aren't having the same problems with clean water as we are.

How does this relate to the weakening rupiah? It's called infrastructure. Who would ever invest in a country that does nothing to improve the quality of life of its citizens?

Seems like Jokowi fooled us all. He put a few drug traffickers to death, but has he done anything to improve on SBY?

Indo still is and will always be a joke. Even my Indonesian wife is finally realizing there's no future here so maybe I can finally get here to move to Malaysia where at least the roads are paved and the water works.
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plumpy nut



Joined: 12 Mar 2011
Posts: 1652

PostPosted: Sat Jun 20, 2015 3:14 pm    Post subject: Reply with quote

jaybet3 wrote:
He put a few drug traffickers to death,


The police probably made some big bucks with the confiscated drugs. If not with those drugs specifically (because of the publicity), they do with others.
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markustm



Joined: 15 Mar 2010
Posts: 95

PostPosted: Tue Jun 23, 2015 2:43 pm    Post subject: A Fresh Reflection on the Declining Rupiah Reply with quote

The problem with the theory that the rupiah is set to collapse isn't really related to the economics of the country.

Indonesia is a wealthy country in terms of natural resources, and has a strong industrial base that exports, with very little national debt.

This is the opposite to many so- called developed countries, which have the highest debts in their history, depend on natural resources from outside their country, and have no real industrial base left to export from, yet for some reason still have a strong currency.

Perhaps the current rupiah situation is simply related to the up-side down economic situation at the moment.

I really cant see the rupiah declining any further, considering the country is largely debt free, and its export markets must be booming now, but who knows?
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bradleycooper



Joined: 12 Apr 2013
Posts: 310

PostPosted: Thu Jun 25, 2015 4:05 am    Post subject: Reply with quote

@ Markustm

It's exports must be booming now? Um...try collapsing. You could actually look at the statistics before making these pronouncements.

Here is the latest shocker, as reported in Focus Economics.

"Exports contracted 15.2% in May 2015 over the same month last year, which followed the 8.3% decline observed in April. May’s result marked the eighth consecutive loss. Non-oil and gas exports, which account for the majority of Indonesian shipments, dropped 10.1% in May (April: 0.0% year-on-year). Similarly, oil and gas exports contracted a staggering 42.3% (April: -45.0% yoy). Meanwhile, imports fell 21.4% in May, which followed the 22.3% contraction in April."
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Listerine



Joined: 15 Jun 2014
Posts: 340

PostPosted: Fri Jun 26, 2015 5:01 am    Post subject: Reply with quote

markustm wrote:
The problem with the theory that the rupiah is set to collapse isn't really related to the economics of the country.

Indonesia is a wealthy country in terms of natural resources, and has a strong industrial base that exports, with very little national debt.

This is the opposite to many so- called developed countries, which have the highest debts in their history, depend on natural resources from outside their country, and have no real industrial base left to export from, yet for some reason still have a strong currency.

Perhaps the current rupiah situation is simply related to the up-side down economic situation at the moment.

I really cant see the rupiah declining any further, considering the country is largely debt free, and its export markets must be booming now, but who knows?


It's partially as a result of factors outside their control. For example the strong $US has caused a lot of currencies in the region to lose value also. The rupiah however is the worst performing in Asia right now. Partially external influences, but in no small part due to internal incompetence.

Natural resources = great. As long as someone is buying them at a decent price that is. Until now that has traditionally been China and before that Japan who due to insatiable demand were paying a pretty penny. Japan's economy is in decline, China's boom has slowed. Prices are coming down. Australia is faced with the same situation. The Indonesian response has been to try and artificially bump up the price of commodities like tin, rubber, palm oil etc, but hey guess what? That same shit is available at the original, cheaper prices from neighboring countries (Thailand, Malaysia).

Mineral bans until mines (particularly foreign owned ones) build smelters to sell the refined product at a higher price? Those things can cost hundreds of millions of dollars and take years to build. Cheaper just to shut the mine down and hope someone with a triple digit IQ (good luck finding one) takes over and decides to revoke the law / ban. In the meantime bye bye to tens of thousands of local jobs.

I remember taking a flight from Bali to Makassar a few years ago and sat next to an Australian working for a mine somewhere in Central Sulawesi. He said even though the company was still making coin the B.S had become unbearable. He cited one case where the local Kabupaten had implemented a new law on the spot - requiring all large tonnage trucks to obtain a new permit in order to operate. Effective as of midnight that same day. Sure enough 8am the next morning a squad of mustache twirling coppers showed up at the mine (plus a couple of other neighboring - foreign owned- ones) for an unannounced permit inspection. The vehicles were all confiscated until a fine of around 200,000 bucks was paid. Oz dude said they were in the process of relocating to Malaysia where even though the profits were lower, so were the bureaucratic headaches and risk.
And his company isn't alone. From mid 2013-the end of 2014 the number of expat owned companies and businesses in Indonesia dropped by 20%, most ditching their rupiah and taking their hard currency with them.

Natural resources when they are mismanaged don't really benefit anyone beyond those at the very top (who promptly get their profits out of the country) and a handful of low skilled workers at the bottom who otherwise would be relegated to crap like carting lumps of sulfur on their backs in places like Kawan Ijen. It helps, but is no guarantee of a successful economy. Take Venezuela, Myanmar, Nigeria for example. Many of the locally owned resource companies (hello, Bakrie) don't even pay taxes.

Indonesia's external debt *is* much better than many, but continues to rise rapidly. The debt to GDP ratio rose from 30% to 46% in the past 12 months. Most third-world countries have pretty low debt-GDP rates as even though richer countries end up with higher amounts of debt a lot of it is serviceable, while places like Indonesia or Jordan often struggle to pay shit back. Side note too a lot of the RI's economic data is based upon (dis)information provided by Bank Indonesia and much of it is unreliable at best and straight up lies at worst. Even the World Bank has admitted many of the stats provided by Jakarta are unverifiable but believe the real figures to be significantly higher/worse than reported.

It seems the catch is for every one positive of the Indonesian economy there are 10 negatives. The hubristic crap endlessly spouted by the (usually Menteng-dwelling, bubble-living, middle to upper class, sh1t-for-brains youth) nationalists about strongest economy in South East Asia - yet still 50% of children are malnourished, 50% still live under $2 a day (technically making it per-capita at ground level the third *poorest* country in South East Asia) more than a quarter of the population practices open defecation. "Highest FDI in South East Asia" which is based only upon amounts pledged, not the actual amount invested. From 2005~2015 only 7% of the amounts promised in investment by China to Indonesia ever actually materialized.

Throw in a rising (younger) population meaning 2 million *new* jobs need to be created every year to placate job seekers, the highest inflation rate in Asia, at least a 20% youth unemployment rate, lowest economic growth in almost a decade, the crippling of the KPK, recent pork barrel funding allocating billions of dollars of tax payers cash to governors and district heads to spend as they wish, continued saber rattling against Australia and Malaysia, growing food insecurity, mounting public and personal debt, woefully inadequate infrastructure, pushes to renegotiate contracts with international investors in Indonesia's favor, new regulations that contract disputes between a foreign corporation and its Indonesian partner can *only* be heard in the notoriously corrupt local legal system, the belief that the much vaunted Jokowi who was supposed to save us all from vile pigs like Megawati and her notoriously corrupt family has just turned out to be a puppet of those same disgraceful cretins...

...all good reasons foreign investors are running scared and the local haves are getting their assets and money into places with more stable banking sectors, economies and judiciaries. Those in the know realize grim times are coming. Certainly were I a Chinese Indonesian I'd be starting to look into alternative countries of residence because there are dark clouds on the horizon and we all know what happens to the "orang cina" when the going gets tough.

Under SBY the country felt like a somewhat rudderless ship. But he was surrounded by at least a handful of competent ministers (ah...dear Sri Mulyani) and favorable economic times with the rise of China and their need for Indonesian resources. The water since has become a lot rougher and with Jokowi (Mega-Puan) at the helm it's starting to feel like the ship is running straight for the cliffs.

Run, baby, run!

/sorry for the essay.
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plumpy nut



Joined: 12 Mar 2011
Posts: 1652

PostPosted: Sat Jun 27, 2015 2:57 pm    Post subject: Reply with quote

Don't be. As usual well written and informative.
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markustm



Joined: 15 Mar 2010
Posts: 95

PostPosted: Tue Jun 30, 2015 4:36 pm    Post subject: Just a thought Reply with quote

Sometimes reading through some of these posts, I wonder if some people are simply hoping the rupiah will really collapse like in 1998, just to justify their years of negativity towards Indonesia, after leaving the country (AKA Bradley Cooper).

Personally, I have lived through a time when the rupiah was weak, and actually lived a pretty good life from teaching.

Perhaps the fact is, a weak rupiah could affect someone choosing to work as a teacher in Indonesia, if they have debts to pay overseas, but otherwise as long as you have a reasonably paid teaching job, it should not really affect your lifestyle especially if you are young, adventurous and single.

One bit of advice would be that life can be tough if you are married to a local, or have children, as nothing is free in Indonesia, so it can create a situation were leaving the country is a better option unless you have a well paid job, but for a single expatriate, Indonesia still can be an interesting place to live in.
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bradleycooper



Joined: 12 Apr 2013
Posts: 310

PostPosted: Wed Jul 01, 2015 9:24 am    Post subject: Re: Just a thought Reply with quote

markustm wrote:
Sometimes reading through some of these posts, I wonder if some people are simply hoping the rupiah will really collapse like in 1998, just to justify their years of negativity towards Indonesia, after leaving the country (AKA Bradley Cooper).

Personally, I have lived through a time when the rupiah was weak, and actually lived a pretty good life from teaching.

Perhaps the fact is, a weak rupiah could affect someone choosing to work as a teacher in Indonesia, if they have debts to pay overseas, but otherwise as long as you have a reasonably paid teaching job, it should not really affect your lifestyle especially if you are young, adventurous and single.

One bit of advice would be that life can be tough if you are married to a local, or have children, as nothing is free in Indonesia, so it can create a situation were leaving the country is a better option unless you have a well paid job, but for a single expatriate, Indonesia still can be an interesting place to live in.


Negativity towards Indonesia?A typical distortion based on anything but fact.

On the contrary, unlike 90% of my former colleagues in Indonesia, I learnt to speak Bahasa Indonesia well. I still read newspapers in Indonesian. In contrast, many of the people who claim to 'love' Indonesia have spent a decade there and can still barely mumble a few elementary-level utterances. They live in an expat bubble and have little idea about what really goes on. Contrast this with someone like Listerine. As his excellent post above makes clear, the country is riddled with problems and the economy is varely limping along. There are some who argue that per capita GDP is actually lower now than in 2011 and the country is literally going backwards.

Anyone who is truly informed about Indonesia knows that it is wracked with problems. Anyone who truly cares about Indonesia knows that corruption is a cancer which is destroying the place. Open the Jakarta Post or Globe and read a dozen new corruption scandals per month. Is the TEFL industry immune? Absolutely not. I warned people on here that Rumah Bahasa was a con in 2013, and by early 2015 it had gone bankrupt. In recent months two more chains, Global Bahasa and Global Language Center, have gone bankrupt. The victims run into the thousands, defrauded of their student payments. This could be termed 'negativity', but it is also the sorry truth. People need to know, because they can get their fingers burned.

Furthermore, I travelled to some 25 provinces of the country, which is more than anyone else I have met. There are some great places to travel, and I strongly recommend the country as a tourist destination. My favorite places are Tanah Toraja, the Pasemah Highlands, The Banda Islands and the area around Manado. There are many more. I have often encouraged people to visit Indonesian on a holiday. But in terms of the industry, its pay is lousy, and that's why recruiters disguised as teachers get antsy.

As for the rupiah collapse, it has already happened. As late as the second half of 2011, it was around Rp.9,000 to the dollar. It breached Rp.10,000 and then Rp.11,000 in 2013. It first went past Rp.12,000 in 2014, and now it is at Rp 13,300. That means it has lost half its value since late 2011. A salary of Rp10,000 was worth $1100 in 2011, but that same salary is worth a measly $670 now. What a couple of people say in forums has very little real impact. The real reason the recruiters are having a hard time is because they are expecting people to work for $700 a month in 2015.
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