[Myhorizon]

A bit of sharing here since some people want to put some Rupiah in Indonesian Banks to enjoy the higher rate there.

Recently, Indonesian Central Bank has reduced its interest rate. So the banks will follow by lowering interest in fix deposits also. However, with lower interest rate, there will be more borrowings and economy activities will start to pick up. The value of Rupiah will drop though because people buy less rupiah and instead borrow more rupiah to drive the economy growth. With more rupiah in the market, value of rupiah inevitably drops in the long term, unless Indonesian businesses can overcome their lackluster economic performance and start earning money into Indonesia, invest in expansion of economic activities instead of hoarding their profits in foreign currencies in offshore banks. Old habits are hard to change though.

So the expectation is a lower rupiah and a lower fix deposit rate.

But then economists have been proven wrong sometimes, and I am from the old school, dunno much about the new technological driven sharing economy. Just want to share an older person perspective. Whatsapp new money involving ASEAN cross border shared payment apps maybe a game changer to Indonesian perennial problem with dropping value in rupiah.

But then Rupiah value is always dropping throughout the eternity years.