The Government is looking for ways to anticipate tightening liquidity amidst the world economic turmoil. One of the ways being planned is to oblige exporters to keep Export Proceeds (DHE) domestically for 3 months.
"So we discussed it for about three months, we are also discussing it with Bank Indonesia (BI) and others," said Coordinating Minister for the Economy Airlangga Hartarto quoted from Antara, Wednesday (25/1/2023).
The Government is currently revising Government Regulation (PP) Number 1 of 2019 concerning Export Proceeds of Foreign Exchange (DHE) from Exploitation, Management and/or Processing of Natural Resources.
In the revised regulation, there is an obligation for the time period for exporters to store DHE. "The initiative permit is being drafted," said Airlangga.
The Government plans to implement the latest regulations regarding the period for keeping DHE domestically in the first semester of 2023. "God willing (first semester of 2023)," he said.
Airlangga explained that currently the government needs to secure DHE because many countries are fighting over US dollar liquidity amid global economic uncertainty.
Moreover, Indonesia has enjoyed export growth and a trade balance surplus over the past 31 months. The increase in exports should be in line with the availability of foreign exchange in the country. "We have to manage how the foreign exchange needs are available domestically," said Airlangga.
Global economic conditions, said Airlangga, also show the risk of capital flight due to the policy of increasing interest rates in developed countries. Therefore, Indonesia seeks to maintain the availability of foreign exchange or foreign currency liquidity in the country in order to maintain a balance between demand and availability of foreign exchange so that the stability of the rupiah exchange rate is maintained.
"The US continues to increase interest rates, we are worried about capital flight," said Airlangga Hartarto.
DPR Supports Government's Desire to Change Export Proceeds Policy
The government through the Minister of Finance Sri Mulyani Indrawati will review changes to the scope and timeframe for placing export proceeds (DHE) domestically.
Related to this, DPR RI Commission XI member Putri Komaruddin supports this policy.
"We certainly support this plan," he said.
According to the Golkar Party politician, until now there are still many exporters who are still parking their funds abroad, so that the growth of Indonesia's foreign exchange reserves is not comparable.
"Because so far there are still many exporters who have parked their funds abroad. Not to mention, it turns out that the growth in our foreign exchange reserves is not keeping pace with the growth in the trade balance," said Putri.
For this reason, the President's move to revise Government Regulation (PP) Number 1 of 2019 concerning Export Proceeds (DHE) is the right step to boost Indonesia's DHE in order to increase the rupiah exchange rate.
"Hence, further arrangements are needed to boost Export Proceeds (DHE) into the Indonesian financial system in order to further increase foreign exchange reserves and the Rupiah exchange rate," he explained.
Government’s Desire
Previously, the Minister of Finance (Menkeu) Sri Mulyani Indrawati would review changes to the scope and timeframe for placing export proceeds (DHE) domestically. This export proceeds foreign exchange policy is contained in Government Regulation (PP) Number 1 of 2019.
"We will make changes, especially regarding the scope. Later we will coordinate with the coordinating ministers first to discuss it," Sri Mulyani said as quoted by Antara, Thursday (12/1/2023).
The meeting between Sri Mulyani and the coordinating minister will also invite Bank Indonesia. The role of Bank Indonesia is important because the export proceeds will involve foreign exchange reserves managed by the monetary authority
"We will discuss it together with the Coordinating Ministers, and ministries, and Bank Indonesia," he said.
President Joko Widodo (Jokowi) previously ordered ministers to review changes to Government Regulation (PP) Number 1 of 2019 concerning Export Proceeds of Foreign Exchange from Exploitation, Management and/or Processing of Natural Resources. Jokowi wants export growth to be in line with growth in foreign exchange reserves.
According to the Coordinating Minister (Menko) for the Economy Airlangga Hartarto, there will be an expansion of the industrial sector that is required to store DHE domestically.
Based on PP No. 1/2019 only the mining, plantation, forestry and fisheries sectors are required to fill in the domestic foreign exchange reserves.
"Now we will also include several sectors, including manufacturing. Thus we will make revisions so of course we hope that the increase in exports and the surplus in the trade balance will be in line with the increase in foreign exchange," said Airlangga.
