In a recent press conference, Coordinating Minister for Economic Affairs, Airlangga Hartarto, shed light on Indonesia’s new policy regarding foreign exchange earnings from natural resource exports. The policy, outlined in the newly established Government Regulation No.8 of 2025, is set to take effect on March 1, requiring exporters to deposit 100 percent of their foreign exchange earnings into domestic banks within 12 months.
Hartarto emphasized that this policy aligns with international best practices, citing similar regulations in Malaysia, Thailand, and Vietnam. While these countries also require deposits of foreign exchange earnings, Indonesia distinguishes itself by allowing exporters to utilize foreign currency to prevent transfer pricing issues and ensure the efficient operation of export companies.
“Our goal is to eliminate transfer pricing,” Hartarto stated, underscoring the government’s commitment to fair and transparent practices in the export industry. To enforce compliance with the regulation, the Indonesian government has warned that companies failing to adhere to the deposit requirement risk suspension of their export permits and face administrative sanctions.
President Prabowo Subianto, who signed the regulation into effect, anticipates a significant boost to Indonesia’s forex reserves, with projections indicating a potential addition of US$80 billion. Since 2023, all resource exporters in the country have been mandated to retain 30 percent of their export proceeds in the local financial system for shipments exceeding US$250 thousand.
Despite the government’s efforts to promote domestic depositing of earnings, Prabowo acknowledged a prevalent preference among exporters to keep their funds in foreign banks. While the administration supports the growth and sustainability of export businesses, it underscores the importance of utilizing dedicated bank accounts for various financial purposes.
Under the new regulation, exporters are granted the flexibility to use foreign currency for dividend payments, non-tax levies, procurement of raw materials, supporting materials, and capital goods. Moreover, funds deposited in special bank accounts can be leveraged to repay loans acquired to finance capital goods acquisitions.
As the Indonesian government ramps up efforts to monitor and enforce compliance with the deposit requirement, exporters are urged to familiarize themselves with the regulations to avoid facing penalties that could impede their operations. The overarching goal remains to foster a fair and transparent trading environment that benefits both exporters and the national economy.
Expert Insights on Forex Earnings Policy
Economic analysts view Indonesia’s new forex earnings policy as a strategic move to bolster the country’s financial stability and enhance transparency in the export sector. Dr. Maria Wibawa, a renowned economist, commends the government’s initiative to align with international standards while customizing regulations to suit the local context.
“By allowing exporters to use foreign currency for essential financial transactions, Indonesia strikes a balance between regulatory compliance and operational flexibility,” Dr. Wibawa explains. She emphasizes the importance of effective communication and support mechanisms to ensure a smooth transition for businesses navigating the new deposit requirements.
Challenges and Opportunities for Exporters
For export companies operating in Indonesia, the shift towards depositing foreign exchange earnings domestically presents both challenges and opportunities. While compliance with the regulation may require adjustments to financial practices and cash flow management, it also opens doors for enhanced financial planning and risk mitigation strategies.
Mr. Joko Santoso, a representative from the Indonesian Exporters Association, highlights the need for exporters to proactively engage with financial institutions and regulatory bodies to navigate the evolving landscape of forex earnings policies. “Adaptability and transparency will be key factors in ensuring long-term sustainability and growth for export businesses in Indonesia,” Mr. Santoso advises.
As Indonesia moves forward with the implementation of the new forex earnings policy, stakeholders across the export industry are urged to collaborate, innovate, and adapt to the changing regulatory environment. By embracing the principles of transparency, accountability, and strategic financial management, exporters can position themselves for success in a dynamic global market landscape.
