The Power of “Cash Is The King” during the Covid-19 Pandemic

Jakarta, 14 September 2020 - It can´t believe it, the Covid-19 Virus Pandemic has been going on for more than 5 months. Various domino effects have been created that have changed the order of life. One sector that has been hit hard by the pandemic that has affected more than 210 countries is the economic sector. Many businesses have collapsed, massive layoffs, salary cuts and others.

The government has been trying to contain this pandemic quickly. Both handling from a health and economic perspective. Both have been carried out by the Government as well as possible. Such as increasing the capacity of the Covid-19 hospital, implementing PSBB, making red and white vaccines, as well as conducting testing, tracing and treatment. Various government programs for social safety nets have been intensively implemented to save Indonesia from the brink of recession. For example, direct cash assistance (BLT) for formal sector workers with incomes below 5 million, Pre-Employment Cards for MSMEs and communities affected by COVID-19 and credit restructuring programs.

However, the Government´s efforts do not seem to be able to save Indonesia from the brink of recession. The reason is, in the second quarter Indonesia´s economic growth has contracted at 5.32 percent. On the bet in Q3, various economists still predict that Indonesia´s economic growth will still contract in the range of minus 1 to minus 3.

Then, if Indonesia is really in a recession, what should we do considering the COVID-19 pandemic is still going on for an unpredictable time? Of course, during an emergency like today, we really have to reduce consumptive things and focus on collecting emergency funds. Emergency funds must be met at least 6 times the monthly expenses for those who are still single. Meanwhile, for those who are already married, we must hold at least funds with a minimum amount of 12 times the monthly expenses. No one knows how long this pandemic will end and its impact on our sources of income. Therefore, providing emergency funds in times like this is very crucial. This emergency fund, of course, must be kept in liquid instruments, with low risk and competitive returns. That´s why the term "cash is the king" is relevant today.

One of the best choices for a liquid emergency fund, low risk and higher return on a saving account is a money market mutual fund. In addition to a very minimal initial investment starting from Rp. 100 thousand, money market mutual funds can also be accessed online through the MNC Duit application. With an indication of a return of 5% p.a, it feels right if we choose to allocate emergency funds to this mutual fund because it is very easy, cheap and profitable.

Remember, the pandemic is still ongoing, increase your emergency fund by saving.