Weakening of rupiah could boost exports: Observer

This is an opportunity for Indonesia to increase its exports because its products have become cheaper in the world market as the rupiah is depreciated.
Jakarta (ANTARA News) - Economic observer Latif Adam of the Indonesian Institute of Sciences (LIPI) said the weakening of local currency rupiah against the US dollar could boost Indonesias exports because Indonesias products have become cheaper.

"This is an opportunity for Indonesia to increase its exports because its products have become cheaper in the world market as the rupiah is depreciated," Latif said here on Tuesday.

He said that Indonesia could increase its exports if it conducted market and product diversification.

The economic observer is of the view that if Indonesias exports become strong, it will have an impact on the stability of rupiah as both (exports and weakening of the rupiah) have causality relations.

"Theoretically, Indonesias exports should increase," he said.

However, he stressed that some of Indonesias export products used imported raw materials, so it could not be generalized that all of Indonesias product exports will increase.

The weakening of the rupiah should serve as a disincentive for its imports and as an incentive for its exports, yet the structure of Indonesias industries still depended on imports, he asserted.(*)

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