Indonesia imposes restrictions on exporters' earnings

The Indonesian government has introduced a new rule requiring natural resource exporters to retain 100% of their foreign exchange earnings in domestic banks for at least one year. Coordinating Economic Minister Airlangga Hartarto stated that the new regulation, approved by President Joko Widodo, aims to strengthen foreign exchange reserves, which recently hit a record $155.72 billion in December. The policy could potentially boost reserves by an additional $90 billion.

Previously, exporters earning over $250,000 in foreign exchange were required to deposit at least 30% of their revenue for a minimum of three months. The updated rule applies to exporters in sectors such as mining, plantations, fisheries, and forestry, who must now hold their full earnings domestically. These funds can be used for local payments and operational needs but must remain onshore for the specified period.

The regulation includes penalties for exporters who fail to comply, such as losing access to export permits. Despite these challenges, the government believes the new rules will contribute to greater economic stability and resilience.