Prabowo Announces New Regulation Requiring 100% DHE Retention for Natural Resources

President Prabowo Subianto announced on February 17, 2025, a new government regulation requiring exporters of natural resources to retain 100% of their export earnings within the Indonesian financial system, effective March 1, 2025. The announcement took place at Istana Merdeka, Jakarta.

The move aims to bolster the nation’s economic resilience by ensuring that export revenues are optimally utilized for national development. The policy is formalized under Peraturan Pemerintah (PP) Nomor 8 Tahun 2025.

Key points of the new regulation:

• Coverage: The regulation mandates that 100% of Devisa Hasil Ekspor Sumber Daya Alam (DHE SDA) from the mining sector (excluding oil and gas), plantations, forestry, and fisheries must be placed into the Indonesian financial system.
• Duration: The DHE SDA must be kept in a special account within national banks for a minimum period of 12 months.
• Expected Impact: The government projects an increase of USD 80 billion in the nation’s foreign exchange reserves in 2025, with potential growth exceeding USD 100 billion over the subsequent 12 months.
• Flexibility for Exporters: Despite the retention requirement, exporters retain the flexibility to utilize the funds for operational needs including:
  • Conversion to Rupiah for business operations.
  • Payment of taxes and non-tax state revenues in foreign currency.
  • Dividend payments in foreign currency.
  • Procurement of raw materials and capital goods unavailable or insufficient domestically.
  • Repayment of loans for capital goods procurement.
• Enforcement: Non-compliance will result in administrative sanctions, including suspension of export services. The implementation of this policy will be monitored by relevant ministries and Bank Indonesia.

According to President Prabowo, the primary goal is to strengthen and amplify the impact of managing foreign exchange earnings from natural resources.

Bank Indonesia has issued Peraturan Bank Indonesia Nomor 7 Tahun 2023, which regulates the inflow and placement of DHE and devisa pembayaran impor (DPI). The aim is to ensure DHE contributes to a robust financial market and macroeconomic stability.

This initiative follows previous regulations, such as Government Regulation No. 36 of 2023, which required exporters to place at least 30% of their export proceeds from natural resources into the country’s financial system. This regulation was designed to address the issue of exporters keeping their DHE offshore, which adversely affected Indonesia’s profitability.