Headline September 29, 2018/ '' 'INDONESIA -STUDENTS- ECONOMICS' ''

'' 'INDONESIA -STUDENTS- ECONOMICS' ''

AS INDONESIA'S CURRENCY trades at it  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 U.S.dollars for the very ailing rupiah.

While easy to brush off as a marketing gimmick, the restaurant's online campaign  ''#bantadolar'', or  ''butcher the dollar'', shows how alarm over the plight of the rupiah is becoming more mainstream in Southeast's biggest economy.

The rupiah, the second worst performer among emerging Asian currencies behind the Indian rupee has shed 9 percent so far this year amid an emerging market sell-off  triggered by rising U.S interest rates and economic crisis in Argentina and Turkey.

''We want to raise the spirit of love in the nation and that is by loving the rupiah,'' said Agung Presertya Utomo, founder of fried chicken chain Ayam Geprek Juara, 63 free meals for customers who sold their dollars, describing them ''rupiah warriors''.

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 a strong capital.

And policy makers have been praised by analysts for responding to global pressures by hiking interest rate faster than any other central bank in Asia and taking step to to cut rising imports.

Nonetheless, they have only been able to slow the rupiah's depreciation, and even with benign inflation right now at 3.2% in August - prices of imported goods and those made using imported raw materials face upward pressure.

Prices of food containing imported diary, beef and wheat are expected to be among the first to rise, according to research firm Nielsen Indonesia.

Analysts have also said chicken prices could be affected through the increase cost for imported corn.

Rising prices, particularly of basic food, would bring the rupiah's woes home to ordinary Indonesians and be a blow to the government of President Joko Widodo, who is seeking a second term next year.

The opposition has already launched social media campaigns attacking the government's economic  management.

In July, President Widodo pleaded with exporters to convert their dollar earnings and his ministers  have repeatedly met with businesses to make the same appeal.

While not all  have listened, Age Sudrajat, chairman of  the association of  textile firms, said this week his members had sold their dollars in the market for an amount equivalent to the six-month cost of wages and electricity.

Most economists still see inflation staying within Bank Indonesia's 2.5 - 4.5 percent target range for this year and next, especially with Widodo capping fuel and power tariffs until 2019 in a populist  pro-election move.

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