Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for Pekalongan city, Nanggolo Wulyo Waniaji, said on Tuesday that handicraft businesses gained more benefits due to the strengthening of the greenback against the rupiah.
He noted that the local handicraft producers use local raw materials for their products, and so they do not depend on imported materials.
"Local producers use local raw materials. They export their goods, and so they earn more in term of values," he stated.
Waniaji remarked that businesses which use imported raw materials, such as batik dresses and other textile products businesses, feel the negative impact of the falling value of the rupiah against the US dollar.
Therefore, the Head of Distribution Statistics Section of the Central Statistics Agency (BPS) of Pekalongan City Burhanuddin explained that the weakening of the rupiah exchange rate would certainly affect the inflation rate in the local area.
The US dollar appreciation influences the inflation rate in Pekalongan City, he noted, because most of the citizens are batik entrepreneurs who still rely on imported raw materials. Therefore, they very much feel the weakening of the rupiah exchange rate against the US dollar.
"In fact, the weakening of the rupiah exchange rate that occurs at this time cannot be assessed now because it will need time to make a comparison of market changes. Nevertheless, inflation will certainly affect people`s purchasing power because the nominal value of money becomes less," he pointed out.
Reporting by Kutnadi