Indonesia to issue revised export rules in February

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Indonesia to issue revised export rules in February

JAKARTA Indonesia will issue a revised regulation on natural resource exporters' earnings in February, the finance minister said on Tuesday, adding that authorities were finalising details.

The resource rich country has been considering revising rules on export earnings to make exporters longer onshore, as a result of tighter global liquidity tightening, including setting a minimum three-month holding period, officials said.

Sri Mulyani Indrawati said financial authorities were looking at determining a threshold for the portion of earnings that exporters must keep onshore, so not to disrupt shipments.

She said the regulation must not be a skeptic of the rules on the free flow of capital.

She said that we will continue to maintain our guidelines so that when our exports are high, Indonesia can be assured that the earnings can strengthen our foreign exchange FX reserves.

She said that Indonesia is committed to maintain a FX regime that does not discourage investment and exports.

Sri Mulyani said that the new regulation would apply to exporters in sectors that process natural resources.

Southeast Asia's largest economy has mandated exporters of natural resources to get earnings in a special account at domestic banks, according to a regulation issued in 2019.

Some exporters have moved their U.S. dollar offshore due to the attractive interest rates offered by foreign banks, according to central bank governor Perry Warjiyo.

Warjiyo told the same event that BI is working on a new instrument to provide better returns for domestic FX deposits.

The officials who spoke at the event did not respond to a question on whether they would make it mandatory to convert some of the FX earnings into rupiah.