Indonesia Mandates 100% of Natural Resource Export Earnings Stay Domestic for One Year

Jakarta, January 21, 2025 – The Indonesian government has announced a new regulation requiring exporters of natural resources to deposit 100% of their export earnings in domestic banks for a minimum of one year, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. The policy, a significant shift from the previous rule, aims to boost the nation’s foreign exchange reserves.

The new policy mandates that all export proceeds from natural resources must be kept in Indonesian banks for at least a year. This is a major change from the previous regulation, which only required a minimum retention of 30% for three months.

, “So, it’s 100% (placement),” Airlangga said as quoted by CNBC Indonesia.

According to Airlangga Hartarto, this policy has been approved by President Prabowo Subianto, and the government has communicated with all relevant stakeholders to ensure no opposition to the policy.

Incentives will be provided for both exporters and banks, including mechanisms for cash collateral and provisions for tax and dividend payments. The government expects the revised DHE SDA policy to increase Indonesia’s foreign exchange reserves by up to US$ 90 billion.

The policy is currently in the harmonization phase, with the government preparing the necessary regulations and coordinating with Bank Indonesia (BI) and the Financial Services Authority (OJK). Airlangga confirmed that the government plans to issue the regulation soon. The government has communicated with all stakeholders, and believes that there won’t be any opposition. As Airlangga said, “There is no (opposition); we have communicated with all stakeholders,”. The incentives that will be offered include provisions for cash collateral, tax payments, and dividend payments.