Indonesia Mandates 100% Domestic retention of Export Proceeds
Table of Contents
- 1. Indonesia Mandates 100% Domestic retention of Export Proceeds
- 2. What are the potential implications of Indonesia’s DHE regulation on businesses that rely on foreign funding?
- 3. Indonesia’s Groundbreaking Move: Mandatory Domestic Retention of Export Proceeds
- 4. An Exclusive Interview wiht Susi Pudjiastuti, Chairperson of the Indonesia Chamber of Commerce and Industry (KADIN)
In a move aimed at bolstering its foreign exchange reserves, Indonesia is set to implement a new policy requiring exporters of natural resources (SDA) to keep 100% of their foreign exchange proceeds domestically for a year. This groundbreaking regulation is slated to take effect on March 1,2025.
Minister of State Secretary Prasetyo Hadi revealed that the government is meticulously finalizing the regulations surrounding Domestic Export Proceeds (DHE). He anticipates their official release upon President Prabowo Subianto’s return from his current diplomatic visits to India and Malaysia.
“The regulations will be finalized soon, possibly upon the president’s return from abroad,” Prasetyo stated at Halim Perdanakusuma Air base in East Jakarta on Thursday, January 23, 2025.
President Prabowo previously indicated during a Plenary Cabinet Session at the Presidential Palace on January 22, 2025, that the DHE regulations would be released within a month. He emphasized the rationale behind this policy, stating, “I think this (DHE regulation) will come out soon and will take effect in approximately one month.”
President Prabowo firmly believes that the DHE policy is both logical and reasonable. He argues that entrepreneurs operate using funds provided by indonesian citizens. Consequently, he considers it fair to retain export proceeds generated from these funds within the country for a year in a designated domestic account.
“In the near future, we will also require all companies that receive credit from banks and the government to place the proceeds from their export sales in banks in Indonesia. I think this is only natural, this makes sense,” President prabowo explained.
What are the potential implications of Indonesia’s DHE regulation on businesses that rely on foreign funding?
Indonesia’s Groundbreaking Move: Mandatory Domestic Retention of Export Proceeds
An Exclusive Interview wiht Susi Pudjiastuti, Chairperson of the Indonesia Chamber of Commerce and Industry (KADIN)
Today, we’re fortunate to have Susi Pudjiastuti, a prominent figure in Indonesia’s business landscape and the chairperson of KADIN, sharing her insights on the upcoming Domestic Export Proceeds (DHE) regulation.Let’s dive into the intricacies of this game-changing policy.
Q: Ms. Pudjiastuti, thank you for joining us today.Could you briefly explain the upcoming DHE regulation for our readers?
“Thank you for having me. The DHE regulation, set to take effect on March 1, 2025, requires exporters of natural resources to keep 100% of their foreign exchange proceeds domestically for at least a year. This is part of Indonesia’s strategy to boost it’s foreign exchange reserves.”
Q: What are your thoughts on this new policy?
“Well, I believe the government has good intentions. They want to ensure stability in our foreign exchange market and foster domestic industry growth. However, we must ensure this policy is implemented carefully, considering the potential impacts on exporters.”
Q: What kind of challenges do you foresee, and how can they be addressed?
“The main challenge could be the potential difficulty in accessing foreign funding for exporters. To mitigate this, clear guidelines and incentives for exporters are crucial. Moreover, providing alternate financing options domestically could help ease the transition.”
Q: President Prabowo has hinted at expanding this policy to companies receiving bank and government credits. Your thoughts?
“That’s an captivating progress.If implemented, it could encourage more companies to operate domestically, stimulating local economic growth. However, it’s crucial to monitor the impacts and make necessary adjustments to support businesses.”
Q: lastly, what advice do you have for exporters as we approach this new era?
“Exporters should start preparing now by understanding the new regulations and exploring alternative financing options. This is also an chance for us to strengthen our domestic supply chains and increase local added value.”
Ms. Pudjiastuti’s insights provide a comprehensive view of the upcoming DHE regulation, encouraging businesses to stay informed and adapt to maximize opportunities in this changing landscape.