When we talk about national identities, what will come across our mind ? For me, they’d be Flag, National Anthem, National Language, and last but not least, the Currency. Those are the pride of the nation. We have our own flag – “Merah Putih”, our own national anthem “Indonesia Raya”, our own language of “Bahasa Indonesia” and “Rupiah” as our currency. I have no dare to claim that I’m a truly nationalist, but in my opinion, in regards to currency, we should use Rupiah in our day to day domestic transaction. But somehow I found an astonishing fact when I was browsing the internet to search any flight promotion (Yes, I’m searching for air ticket again for Medan trip later in December) :p
This is the screenshot from Batavia Airlines website for the ticket reservation.
Look at the fare for the ticket. Wow, in US Dollar! How can that be ? At first I thought I made a mistake in the homescreen of the site where there was question whether we browse from Indonesia or other countries and also on our language preference (Bahasa Indonesia or English). I chose Indonesia and English. I thought the USD rate was due to choice of English as language. But then when I switched to Bahasa Indonesia, there was no change in the currency either. What a surprise!
In my opinion, any transactions should use Rupiah currency, with exceptions for international related such as flight and maybe some transactions in area of border line, lie in between Indonesia and other countries such as Malaysia and Singapore.
I find Batavia’s decision to change its fare from Rupiah to US Dollar is particularly driven by business reason, in the wake of weakening Rupiah following global financial turmoil. Perhaps the costs borne by the airlines are mostly in US Dollar so that they have to find way to balance their books, one of them is by charging in US Dollars. But again, it’s rather unacceptable. If other companies follow this way, the demand for dollar will continue to rise, people will ditch Rupiah for safer haven in US Dollar which in turn will exacerbate the downfall of Rupiah. As I write this post, the latest exchange rate at Yahoo Finance! is USD 1 for IDR 11.050, representing an almost 20% depreciation in just one and a half months.
To my surprise, our Central Bank Governor was quoted about the worrying fall of Rupiah yesterday (when Rupiah passed IDR 10,000 barrier) and his response was “There’s nothing special”! Wow what a statement. Although it’s due to impact of global financial crisis, the government ought to do something to prevent further steep fall. If not taken properly, sooner or later, this will impact companies with foreign currency debt. More and more companies will fail, retrenchment to follow, unemployment will rise. That’s the domino effect. I’m not an economist nor a financial expert but trust that the officials up there know what they are going to do.. hopefully..
Strangely, it’s United States who has the financial crisis, but US Dollar continues to strengthen against other countries (except Yen). What a jinx you are Uncle Sam! You’re the one on crisis, yet you drag other countries to drown with you..
Hendro Santoso's Hut 