Bank Indonesia (BI) says it is hoped that all companies in Indonesia can use rupiah for all daily transactions starting from July 1.

'€œIn the short term, there might be some obstacles to overcome because the companies will have to convert their US dollars into rupiah before making payments and this demands additional costs,'€ the central bank'€™s assistant director of money management department, Agustinus Fajar Setiawan, said as quoted by Antara in Semarang on Wednesday.

However, he said, BI hoped that this would not be used as an excuse by companies to avoid using rupiah for transactions because this regulation must be upheld. There would be tough sanctions for any company which violated the rule, starting from warning letters to prohibiting them from attending finance service traffic.

'€œIf starting from July 1 there are companies that still carry out non-cash transactions using US dollars, we will impose sanctions on them,'€ said Agustinus.

'€œFirst, we give them a written warning. Second, we will order them to pay fines amounting to 1 percent of the total transactions at a minimum and Rp 1 billion (US$75,000) at a maximum,'€ he said.

As a final sanction, they would be prohibited attending finance service traffic and prohibited from making transactions using banking services, he added.

Agustinus said BI hoped that banking transactions in US dollars, which now had reached between $6.5 billion - $7.1 billion per month, could be reduced in stages. (++++)

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