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Jakarta Post

Tighter capital rules possible, yet controversial

  • Anton Hermansyah

    The Jakarta Post

Jakarta   /   Wed, June 13 2018   /  01:54 am

The idea of regulating incoming foreign exchange has entered the public discourse again following recent global uncertainty that resulted in heavy capital outflows, but questions linger on whether the measure will negatively affect investor perceptions of the country.Several bankers seem to be open to the idea, widely known as capital controls, but only with extra caution.Kartika “Tiko” Wirjoatmodjo, president director of state-owned lender Bank Mandiri, said partial capital controls could be implemented by imposing an exit tax on investors who wish to pull investment out of the country, or implementing mandatory retention on export proceeds — which are usually in foreign currencies.Another example, he said, was giving incentives to exporters and multinational companies through the form of a lower bank deposit tax should exporters deliberately wish to convert export proceeds to rup...