Holiday Ayo - The rupiah exchange rate has still weakened against the US dollar recently. It is also suspected that this will have an impact on increasing material prices, including materials for the construction of the Indonesian Capital City or IKN. So, what is the impact on project financing? 

Minister of Public Works and Public Housing (PUPR) Basuki Hadimuljono said the weakening of the Garuda currency would not only impact IKN projects but also all construction and infrastructure projects.

Because as is known, the weakening of the rupiah can cause an increase in the prices of imported materials. Meanwhile, construction projects still depend on imported materials.

“Actually, it will have an impact not only in IKN, it will definitely have an impact in other places," said Basuki when met at his office, Jakarta, Friday (21/4). 

Meanwhile, regarding the escalation of the value of the IKN project, Basuki said that currently it has not been decided whether it will be carried out. 

This is because the government has not yet decided that the weakening of the rupiah is a force majeure situation. 

Industry is starting to worry about the weakening of the Rupiah against the US Dollar Kompas.id article Basuki said, the new government will discuss the latest national economic conditions at the DPR RI Plenary Session Monday (24/6). 

“In that case, there usually has to be a national force majeure decision so that others can escalate it. But until now this has not happened. If a national decision has been made, it can be escalated," he explained.

However, even though the IKN project budget has the potential to swell due to the weakening of the rupiah exchange rate, there is a State Revenue and Expenditure Budget (APBN) that can be used as a shock absorber.

“In the past, during the pandemic, it also swelled, it was situational, right? That's why the Minister of Finance always says that our instrument is the APBN, the APBN is the instrument for that," he concluded. 

For your information, the rupiah exchange rate against the US dollar on the spot market closed lower again on Friday (21/6). 

The rupiah exchange rate continues to move above Rp. 16,400 per US dollar, and approaching the level of Rp. 16,500 per US dollar. 

Based on Bloomberg data, the rupiah exchange rate continued to weaken throughout the day in the range of IDR 16,440 - IDR 16,481 per US dollar. In the end, the rupiah closed down 0.12 percent at IDR 16,450 per US dollar.