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BI to impose new policy to keep export earnings at home
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The Bank Indonesia office complex in Jakarta is seen on Feb 26, 2020. (JP/Dhoni Setiawan)
B
ank Indonesia (BI) will introduce a new policy for local banks to match interest rates offered by foreign lenders, in a move to persuade exporters to keep their foreign exchange (forex) earnings at home in order to beef up the country’s reserves and maintain the rupiah’s stability.
BI Governor Perry Warjiyo said on Thursday that the new policy would make it possible for exporters to earn yields from local banks comparable with those offered by foreign lenders.
Perry said this new policy would lead to forex earnings being kept in Indonesia for a longer period, of between one and three months, after they entered the country’s financial system.
The government and BI have already mandated exporters to deposit their export earnings in Indonesia for specified periods but with only limited success.
“We are sure that it [the new policy] will improve our foreign exchange reserves in the domestic market and help stabilize the rupiah,” Perry told reporters during a monthly briefing.
Read also: Many firms still keep export earnings overseas
The announcement came after a weakening of rupiah against the United States dollar since the beginning of this year. As of Dec. 21, the rupiah had depreciated by more than 8.56 percent year-to-date (ytd).
