Indonesia to introduce export ban for 3 months

Indonesia to introduce export ban for 3 months

A top government official said on Wednesday that JAKARTA Indonesia plans to introduce a requirement for exporters to keep their foreign exchange earnings in the local banking industry for three months.

Airlangga Hartarto, chief economics minister, was quoted as saying by mainstream media outlets that the plan was being discussed with the central bank and a review of current requirements for export earnings was nearly complete.

His ministry's spokeswoman didn't respond immediately to a request for comment.

He said earlier this month Indonesia was considering revising a 2019 regulation that mandated exporters of natural resources keep earnings in a special account at domestic banks, including the possibility of setting a minimum holding period. He said it might be expanded to cover exporters in the manufacturing sector.

Indonesia is the world's largest exporter of thermal coal and palm oil. It is a major exporter of nickel, tin, copper, and rubber, among other commodities.

Bank Indonesia BI is aiming to launch a new FX instrument for banks next month.

Banks will be allowed to pass on deposits to the central bank and the central bank will pay a premium interest rate for the U.S. dollar to encourage exporters to keep earnings onshore for longer, according to monetary policymakers.