Indonesian chain offers free meals to help rupiah
JAKARTA: As Indonesia's currency trades at its weakest levels since the 1998 Asian financial crisis, a local restaurant chain is offering free meals to clients who can prove they have exchanged holdings of US dollars for the ailing rupiah.
While it is easy to brush this off as a marketing gimmick, the restaurant's online campaign #bantaidolar, or butcher the dollar, shows how alarm over the plight of the rupiah is becoming more mainstream in South-east Asia's biggest economy.
The rupiah, the second worst performer among emerging Asian currencies behind India's rupee, has shed 9 per cent so far this year amid an emerging market sell-off triggered by rising US interest rates and economic crises in Argentina and Turkey.
"We want to raise the spirit of love in the nation and that is by loving the rupiah," said Mr Agung Prasetyo Utomo, founder of fried chicken chain Ayam Geprek Juara, which says it has so far given out 83 free meals to customers who sold their dollars.
In Indonesia, there is a particular sensitivity over sharp falls in the rupiah. The currency's slump in the 1998 financial crisis triggered rampant inflation, food shortages and riots in Jakarta that led to the fall of strongman ruler Suharto.
Indonesia's economy is in far better shape than in 1998 - the fall in the rupiah has been gradual, foreign debt levels are low and the banking industry has strong capital. And policymakers have been praised by analysts for responding to global pressures by hiking interest rates faster then any other central bank in Asia and taking steps to cut rising imports.
Nonetheless, they have only been able to slow the rupiah's depreciation, and even with benign inflation - at 3.2 per cent in August - prices of imported goods and those made using imported raw materials face upward pressure.
Rising prices, particularly of basic food, will bring the rupiah woes home to consumers and be a blow to the government of President Joko Widodo, who is seeking a second term next year. - REUTERS