Increasing the use of the Indonesian Rupiah in border areas can boost the local economy. As cross-border transactions involve two currencies, this stimulating enthusiasm for using Rupiah at Merauke border boosts the economy.
To achieve this, Bank Indonesia is encouraging the use of Rupiah and fostering a greater sense of enthusiasm for its use in the border region.
The Importance of Using Rupiah in Border Areas
Bank Indonesia has granted permission to the Village-Owned Enterprises (BUMK), Ni Kanjeraei, to conduct foreign currency exchange activities in PLBN Sota, Merauke, South Papua. The Sota district is the border area between Indonesia and Papua New Guinea in the easternmost part of Papua.
Therefore, the presence of BUMK is necessary to increase the use of Rupiah. BUMK Ni Kanjerai is expected to boost trade in the Sota-Merauke border area, ultimately improving the surrounding communities’ welfare.
According to Puspa, the Head of the National Border Post Office (PLBN) in Sota, the exchange of Kina to Rupiah was previously conducted illegally with individuals before the presence of BUMK. Previously, traders used a barter system between goods in PNG and Merauke.
However, since its official opening, all exchange processes have run smoothly, benefiting both traders and residents from PNG.
In Papua, in addition to the Merauke Regency, the use of Rupiah has also been implemented at the Skouw Border Post in Jayapura, Papua. Therefore, the policy of using Rupiah in international activities supports the stability of the Rupiah exchange rate.
Additionally, it can encourage the deepening of the financial market and promote improvements in the domestic economic structure.
Problem-Solving Efforts
The Director of BUMK Ni Kanjeraeni, Ahmad Hidayat, stated that the information about the presence of BUMK has not yet spread evenly among traders and residents of PNG.
Therefore, the exchange has not been optimal. Hence, they are making several efforts, such as installing banners, brochures, and stickers at every stall and other public facilities.
Ahmad said the exchange has been done through transfers or visas because this BUMK is still new. Therefore, the exchange services will be gradually improved over time.
Foreign currency exchange is currently the most crucial issue in financing because BUMK originates from a village, so financing remains a problem. Therefore, in the future, they hope there will be investors who can help.
The presence of BUMK at PLBN Sota can solve the problems that have arisen. Previously, Bank Indonesia conducted inspections and prohibited transactions using barter. Hence, by imposing regulations related to exchange, the economy can improve.
Ahmad said that for the exchange, 1 Kina (PNG currency) is sold for Rp3.400. This price is indeed very different from international rates because the initial capital is from the village funds.
Bank Indonesia’s Support to Advance Border Market
The presence of BUMK at PLBN Sota can boost the economy in border areas. Additionally, it can provide convenience for residents and traders to conduct transactions.
Bank Indonesia has granted permission to BUMK Ni Kanjeraei to conduct foreign currency exchange activities in PLBN Sota, Merauke, South Papua. Therefore, BUMK Ni Kanjerai can boost trade in the Sota-Merauke border area, ultimately improving the surrounding communities’ welfare.
The Head of the National Border Post Office (PLBN) in Sota, Merauke, South Papua, also stated that they hope BUMK will facilitate foreign currency exchange transactions in the border market. He added that the market in the Sota border area opens from Monday to Friday, and on average, 15-25 people enter each day. However, the number could increase during religious holidays.
In an effort to increase the use of Rupiah in border areas, Bank Indonesia will increase the amount of circulating money or even bring mobile cash services if necessary. Increasing the use of Rupiah in border areas can positively impact Indonesia’s overall economy. In other words, stimulating enthusiasm using rupiah at Merauke border boost economy.
