Ilona Estherina, Jakarta – President Prabowo Subianto addressed the weakening Indonesian Rupiah during the launch of the Red and White Village Cooperative in Nganjuk, East Java, on Saturday, May 16, 2026. The head of state urged the public to remain calm despite the currency sliding to Rp17,500 per US Dollar.
Prabowo argued that only those traveling abroad should be concerned by the strengthening dollar. "As long as Purbaya (Finance Minister) can smile, there is no need to worry. No matter the dollar's value, it is not used in villages," the President remarked.
Syafruddin Karimi, a professor at the Faculty of Economics and Business at Andalas University, suggested the statement was intended to manage public psychology and prevent panic that could further pressure the exchange rate. However, he warned that public composure should not be built on an oversimplification of the issue.
"Indeed, villagers do not use dollars in the market, warung (small shops), rice fields, or animal farms. Even so, they still live within the national price system, which is heavily influenced by the dollar," Syafruddin said when contacted on Sunday, May 17, 2026.
The invisible impact on rural costs
He explained that rural communities feel the impact of a weak rupiah indirectly. As the currency falls, the costs of importing oil, gas, fertilizer, animal feed, pesticides, medicines, agricultural tools, plastic packaging, and consumer goods rise.
These increased costs move through the distribution chain, from ports and warehouses to distributors and local stalls, before reaching rural households. "The village does not need to pay in dollars to feel the impact of the dollar," Karimi noted.
A stronger dollar also drives up prices for non-subsidized fuel, transportation for harvests, and building materials. Exchange rate pressures will inevitably seep into rural areas if the government fails to stabilize the costs of energy, food, and production inputs.
Small farmers and breeders face a double burden: production costs rise rapidly, while the selling prices of their harvests often lag, dictated by middlemen or government policies.
While commodity exporters may benefit from a weak rupiah as their dollar earnings increase when converted, Karimi argued that these gains do not automatically trickle down to small-scale farmers.
The professor concluded that the government should shift its messaging. Rather than stating "the village does not use dollars," the focus should be on ensuring "the village does not bear the impact of the dollar alone."
Source: https://en.tempo.co/read/2104006/is-prabowo-right-that-villagers-dont-use-dollar