Indonesia Mandates Exporters Retain Forex Earnings Onshore

Indonesia has enacted a regulation requiring natural resource exporters, excluding oil and gas, to retain all foreign exchange earnings within the country for one year, effective March 1, 2025. This policy aims to bolster the central bank's reserves by $80 billion and stabilize the struggling rupiah, which has faced significant depreciation. President Prabowo Subianto emphasized that the move is essential for optimizing natural resource revenues for national development and domestic economic circulation. Exporters will still have the flexibility to utilize their earnings for operational needs, including taxes and loan repayments. Non-compliance with the new regulations may result in sanctions, including suspension of export services. The regulation arrives amid concerns over weak consumption and slow economic growth in Indonesia.