Indonesia to Apply Export Earning Retention Rules to Sums of at Least $250,000

February 28, 2023, 02.13 PM | Source: Reuters
Indonesia to Apply Export Earning Retention Rules to Sums of at Least $250,000

ILUSTRASI. export activity

MACROECONOMICS - JAKARTA. Indonesia's plan to make exporters retain 30% of their earnings onshore will apply to proceeds of at least $250,000, Chief Economics Minister Airlangga Hartarto said on Tuesday.

The central bank hopes keeping funds in-country will help support the rupiah currency if U.S. interest rates continue to rise as expected.

Policymakers in Southeast Asia's largest economy have long been concerned about exporters' habit of parking earnings in offshore bank accounts, even after authorities required them to receive proceeds through local banks more than a decade ago.

Airlangga told an economic forum exporters can convert their foreign currency earnings into rupiah but stressed that it was not mandatory. Once the new rules are issued, firms will be allowed three months to comply, he said.

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It was unclear when the new rules would be issued. They will apply to proceeds from shipments of natural resources and their derivative products.

"Not only do we export the resources, but the results of those exports can be enjoyed at home," he said.

Some bankers say the measures will spur repatriation of offshore funds and help anchor the rupiah, though how much will flow into Indonesia remains unclear.

Editor: Yudho Winarto

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