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Heavy sanctions imposed against dollar transactions
One-year jail terms and heavy fines are waiting for people who continue using US dollars for domestic transactions as of Wednesday, the law states
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ne-year jail terms and heavy fines are waiting for people who continue using US dollars for domestic transactions as of Wednesday, the law states.
The enforcement is part of central bank Bank Indonesia's (BI) new regulation No. 7 that regulates the mandatory usage of rupiah for all transactions onshore, with the central bank banning all transactions conducted in foreign exchange currencies such as the US dollar.
In a statement released by BI in June, the bank announced that it would ban any transactions, cash or non-cash, using foreign denominated currencies in the country and would impose heavy sanctions against any violators, starting July 1.
In imposing the sanctions against any cash transactions with foreign currencies, BI refers to Article 33 of the 2011 Currency Law.
The article states that any person who does not use rupiah for transactions will face a maximum of one year in jail or a Rp 200 million (US$15,012) fine.
Meanwhile, for non-cash transactions, the central bank will send a warning letter first. Should violators ignore two such letters, the persons must pay a fine equal to 1 percent of the transaction figure or a maximum of Rp 1 billion.
BI decided to enforce the regulation to control local demand for dollars and stabilize the rupiah, known to be among Asia's most volatile currencies, despite opposition from business players.
The rupiah was traded at 13,330 per dollar on Wednesday morning, dropping by 10 points from the previous trade.
Data from Bloomberg showed that the currency led losses in Asia in 2015. (ika)(++++)
