JAKARTA, Feb 14 (Reuters) - Indonesia will require some
exporters to retain around 30% of their export earnings onshore
for three months under new rules aimed at shoring up the
country's foreign exchange reserves by up to $50 billion a year,
a senior official said on Monday.
Chief economic affairs minister Airlangga Hartarto said the
plan aimed to anticipate the impact of further U.S. monetary
tightening and the upcoming maturity of government and corporate
bonds denominated in U.S. dollars.
"The government is looking at what needs to be done so that
Indonesia's FX (supply) did not run dry," Airlangga told an
economic seminar.
He noted that the size of FX trading in neighbouring
Singapore dwarfed that in Indonesia, increasing economic
vulnerability since it "made it very easy for other parties to
corner a country like Indonesia."
The planned rules would still be less strict than in some
other countries in the region, such as Thailand and Malaysia,
Airlangga said.
The rules should bump up Indonesia's FX reserves by $40
billion to $50 billion in a year, he said. The country's
reserves stood at $139.4 billion at the end of January.
Airlangga did not say when the rules would become effective.
Finance Minister Sri Mulyani Indrawati has previously said the
planned regulation, which she has stressed is not a form of
capital control, would be issued this month.
Southeast Asia's largest economy has since 2019 mandated
that all natural resource exporters receive earnings in a
special account at local banks. Authorities have provided
incentives for companies to keep funds longer onshore and
convert them to rupiah. Exporters are, however, free to move
funds offshore.
The central bank said last year some of the exporters
transferred their proceeds soon after receiving them because
offshore banks offered higher interest rates for term deposits
amid a tighter supply of U.S. dollars globally.
Indonesia registered record annual exports last year of $292
billion and its biggest annual trade surplus of $50.5 billion,
driven by an upward cycle of global commodity prices.
(Reporting by Bernadette Christina Munthe and Gayatri Suroyo
Editing by Ed Davies)
