JAKARTA (TheInsiderStories) – The depreciation of Rupiah exchange rate impacted weaponry system procurement, including Korea Fighter Xperiment or Indonesia Fighter Xperimen (KFX/IFX) fighter jet. Therefor, Indonesia planned to renegotiate the contract to secure foreign exchange reserve.
“As we know, the developing countries’ currencies including Rupiah with no exception, experiencing tremendous pressure. We really appreciated South Korean government for its understanding to have renegotiation,” said Head of Investment Coordinating Board Thomas Lembong on Friday (19/10).
He assured that the renegotiation has been approved by South Korea President Moon Jae-In when Indonesia President Joko Widodo’s visit Seoul, last month.
Indonesia government is acting thoroughly in this renegotiation. It is expected to not impact both countries cooperation in other sectors. Especially, South Korea is Indonesia’s one of the biggest investors.
Coordinating Minister for Political Legal and Security, Wiranto added, Indonesia will not cancel this cooperation plan. Thus, Indonesia expected getting payment relief from the renegotiation.
“We’ll discuss about a lot of things, from payment ability, possible percentage of development cost sharing, production cost, technology transfer to Indonesia, intellectual rights profit, to marketing. A lot of things,” the minister said.
Rupiah keep depressing since the beginning of 2018. It reached 14,000 for the first time of the year, on May 8th, and spiked to 15,221 today. Far worse than 2018 macro assumption in 13,400 Rupiah per US Dollar.
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