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<\/p>\napanese companies operating in Indonesia are expecting declining profit this year as rupiah value swung worse than anticipated while the Middle East conflict introduced more adverse effects that spiked costs in logistics and raw material imports.<\/p>\n
A survey conducted by Japan External Trade Organization (JETRO) in April and May found that almost half of 205 Japanese manufacturing firms involved in the survey expected a declining profit this year.<\/p>\n
Yamada Kenji, JETRO Jakarta senior director, told The Jakarta Post on Friday that \u201cimport costs are rising\u201d due to \u201cweak currency\u201d given that the contracts were mainly in United States dollars.<\/p>\n
The rupiah value against the greenback had dropped by about 7.5 percent from 16,675 per dollar at the turn of the year to Rp 17,940 on Sunday. The plunge made it Asia\u2019s weakest performing currency this year.<\/p>\n
The latest reading had already marked an improvement from a nadir of over 18,200 per dollar recorded in June when the currency breached the historic low of 17,300 per dollar that lasted for decades, recorded during the Asian Financial Crisis in the late 1990s.<\/p>\n
The currency started weakening when the Iran war began in late February. The depreciation played out gradually at first until it turned rapid in late May and early June, which was only contained after Bank Indonesia hiked the interest rate outside the scheduled monthly rate decision.<\/p>\n
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