JAKARTA (Reuters) – The Indonesian government is working out incentives for exporters to keep foreign exchange earnings in the country for at least three months, the chief economy minister said on Thursday.
Airlangga Hartart said the government would offer “competitive” interest rates to exporters who deposit their foreign currency earnings in local banks.
“We must make [interest rates] Competitive compared to Singapore, [FX earnings] It won’t flow to Singapore,” he said, referring to the city-state’s appeal as a regional financial hub.
He added that the proposed minimum holding period is three months in Indonesia’s financial system.
When asked about the rationale for the three-month holding period, Airlangga said he needed a buffer against weather risks, including a possible slowdown in the global economy this year.
“We need enough [U.S. dollars] to fund our imports and exports,” he added.
The minister said the incentives will be stipulated in a 2019 revision to regulations requiring natural resource exporters to keep earnings in special accounts at domestic banks.
Previously, he said the regulatory changes also included the possibility of applying FX rules to exporters in the manufacturing sector and more attractive tax incentives for special savings for exporters. .
Apart from the government, Indonesia’s central bank has also announced plans to launch a new monetary policy instrument aimed at providing exporters with better returns on domestic foreign currency deposits, which could be launched next month. planning.
Reporting by Stefanno Sulaiman.Edited by Kanupriya Kapoor
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