AmCham Update
AmCham Update Vol. 3 #105
Rupiah Falls Against USD, Jokowi on Startup Failures, Covid Cases Rising, Don't Panic Over Rice Prices
Sep 26, 2022


Rupiah Hits Rp 15,100/USD

The rupiah continues to fall against the US dollar, hitting Rp 15,100 per USD today, Sept 26, its weakest since May 2020. The USD, on the other hand, skyrocketed 3.12 percent in a week, the strongest since May 2020. One of the biggest contributors was the US Federal Reserve increasing its benchmark Federal Fund Rate (FFR) to 3.25 percent, up 75 bps.

The Federal Open Market Committee (FOMC) has predicted the FFR hike will continue, with a 4.4 percent projection by the end of the year. Bank Indonesia recently increased its benchmark rate by 50 bps to 4.25 percent to counter the impact of inflation in developed countries.

Weakening European currencies also boosted the dollar, with the UK's pound sterling falling 3.5 percent against the dollar on Sept 23, to its weakest point in the last 37 years. The euro also fell, with a 15 percent slide since the beginning of this year. Uncertainties in the currency market have strengthened the dollar even more, as it is seen as a safe haven among currencies.

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Startups Fail Because They Don't Read the Market: Jokowi

Determining what the market needs is key for the success of startups in Indonesia, President Joko Widodo told the State-owned Companies (BUMN) Startup Day 2022 event this morning, Sept 26. He said many startups fail here because they are unable to see accurately what the market needs, and cited lack of funding in the initial stage as another problem, which was unfortunate given Indonesia’s growing digital economy driven by the pandemic. He urged BUMN to take part in building the ecosystem for startups to flourish.

In June this year, at least seven big startups in Indonesia conducted mass layoffs, dubbed the bursting of the startup bubble. However, Bima Laga, chairman of the Indonesian E-Commerce Association (idEA), said Indonesia’s digital economy is still growing to fulfill the needs of the public post-pandemic, and the bubble burst will not be a significant hindrance to growth going forward.

Indonesian digital wallet company DANA recently reached unicorn startup status following undisclosed capital injections from Sinarmas and Lazada Group. The company has an estimated book valuation of $1.13 billion.

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AmCham Cares: CarbonX

CarbonX and the Indonesia Indah Foundation (IIF) organized the planting of 3,000 mangrove seedlings in Brebes, Central Java, on Aug 26, as part of the Saya Pahlawan Lingkungan (I am an Environmental Hero) environmental education program, which is being implemented in 35 national schools in the Greater Jakarta area. The planting, in which selected students took part, augmented the school's existing environmental education curriculum.

Recent tidal floods along Java’s northern coast have inflicted substantial losses on local communities and serve as a gentle warning that climate change poses an imminent threat to vulnerable communities in the area. CarbonX, whose aim is to be a driving force in achieving global net-zero carbon emissions through fostering growth and development toward a greener future, was inspired by the story of community-based mangrove restoration in Brebes, and its contribution in planting 3,000 seeds of Rhizopora mucronata, a native mangrove, marks its intention to accelerate the positive effects of mangrove restoration on the local ecosystem and its inhabitants. The planting signifies the company's long-term ambition to become a driving force in the transition towards a sustainable future.

CarbonX believes the Brebes model of cooperation can be replicated elsewhere in Indonesia through a comprehensive coalition of relevant stakeholders.


Let Us Know Your Recent Social Responsibility Initiatives!

We have received positive responses for this program and would like to continue featuring your CSR stories and best practices. It is wonderful to learn the great things that our members are doing for the community.

Contact awis.mranani@amcham.or.idwith your CSR stories.


Covid Daily Cases Rise by 1,411

Indonesia saw 1,411 new daily Covid-19 on Sunday, Sept 25, with Jakarta remaining the biggest contributor. Jakarta Covid-19 Task Force data shows the capital had 580 cases, followed by West Java (222), East Java (171), Banten (134), Central Java (82), and North Sumatra (24). However, total active cases fell by 1,174 from the previous day to 20,808.

The Ministry of Health is also waiting for direction from the World Health Organization (WHO) on the vaccination program going forward, with Head of the Communication and Public Service Bureau at the Ministry of Health Siti Nadia Tarmizi saying the WHO will determine whether further Covid-19 vaccinations need to be routine or optional.

Coordinator of the Expert Team and Spokesperson of the Covid-19 Handling Task Force Prof Wiku Adisasmito also reminded the public to remain vigilant and get their boosters. He said that to start the transition from pandemic to endemic, there needs to be strong public awareness and readiness from local governments.

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Rice Prices Rise, Minister Says Don't Worry

Minister of Trade Zulkifli Hasan (Zulhas) has told the public not to panic following the recent increase in rice prices. Zulhas said the rise was due to the increase in the purchase price of grain, which rose from Rp 4,400/kg to Rp 5,500/kg. However, he said the government will make every effort to ensure the price of rice remains affordable, such as by providing rice subsidies to the community. Secretary General of the Ministry of Trade Suhanto said the government has a Price and Supply Stabilization Reserve (CSHP) to maintain the stability of rice prices, so in the event that prices are higher than the maximum retail price (HET), then the government will step in to pay the rest.

Additionally, Zulhas proposed the government provide Rp 100 trillion to absorb agricultural products from farmers. The proposal aims to make farmers more prosperous and ensure the price of basic commodities remains affordable, and has already been submitted to the President.

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Now is the Time to Join AmCham!

Now is the Time to Join AmCham!

We offer a full slate of meetings, events, and information for our community   online. But we can only do this through the support of our members. If    you are not yet an AmCham member, please join now.

AmCham Indonesia is open to all companies with an interest in US business  relations and we have many non-American members. We are   a  community and we welcome you!

  Reach us at [email protected] or click below!

  JOIN AMCHAM


 

AmCham Office and Events

AmCham Office and Events

The AmCham Office is transitioning back to the office. We are still maximizing online meetings, using the Zoom platform, but starting to have in-person meetings. You will be notified of the meetings as they are scheduled.

 

 


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What is Your Company Doing on COVID-19?

Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.


Stay well

We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy

Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.


AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.

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