Indonesia Curbs Imports to Support Rupiah

Caviar, chocolate and stretch limousines could get a whole lot more expensive in Indonesia as the government takes steps to curb imports and halt a sliding currency.

Authorities have reviewed 900 products—from luxury items to basic goods like coffee, tea, pasta and ice cream—some of which will soon carry higher import taxes. A final list will be published as early as Wednesday, Bloomberg reported.

Finance Minister Mulyani Indrawati said Tuesday the restrictions were needed after imported consumer goods surged more than 50% in July and August. “The government’s current efforts to cut imports, especially for consumption goods, might affect household consumption growth next year,” she said.

The government and central bank are stepping up action to protect the rupiah, which is heading toward 15,000 to the dollar for the first time since the Asian financial crisis two decades ago. Bank Indonesia has adopted a number of measures to improve liquidity and authorities said they will clamp down on speculation in the foreign-exchange market to curb volatility.

“If there is sentiment coming from speculation, if there are some parties trying to benefit from the current situation for their own interest, the government, Bank Indonesia and the Financial Services Authority will monitor and take firm action against them,” Indrawati said.

“This is needed to differentiate the genuine players in the economy, who maintain the economy and their businesses amid the current volatility, with those who only want to make profit,” she said.

The rupiah lost as much as 0.8% to 14,933 on Tuesday, the lowest since July 1998. The Jakarta Composite Index fell as much as 1.2%, extending its retreat into a fourth day, the longest streak since June 22.