Intellasia East Asia News – PP No.36/2023 can increase FER to $300 billion: minister

Coordinating minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan stated that governmental Regulation (PP) No. 36 of 2023 can increase foreign exchange reserves (FER) to $300 billion.

Pandjaitan remarked at the Halim Perdanakusuma Air Force Base here on Thursday that the regulation requires exporters in the natural resources sector to store at least 30 percent of Foreign Exchange of Export Earnings (DHE) in the domestic financial system, with a minimum period of three months.

“We ask them to keep (DHE) domestically for three months, and Bank Indonesia (BI) will give interests. Hence, our foreign exchange reserves can reach $300 billion this year,” he noted before accompanying President Joko Widodo (Jokowi) to fly to China.

Meanwhile, according to the Bank Indonesia (BI) data, as of June 2023, Indonesia’s FER had been measured at $137.5 billion.

Furthermore, he said that PP No. 36 of 2023 on DHE from Natural Resource Management, which was signed by President Jokowi on July 12, 2023, is very important.

DHE stored in the domestic financial industry can benefit the economy, he remarked.

“DHE is very important. Domestically circulating funds from exports of mines can be up to $9 billion,” he noted.

The regulation also stipulates that the placement of DHE from natural resource exports must be carried out no later than the end of the third month after the registration month of the Export Customs Notice (PPE).

The DHE can be deposited in a special bank account, other banking instruments, financial instruments issued by Indonesia Eximbank (LPEI), or instruments issued by BI.

Moreover, the regulation states that “in the event of macroeconomic and/or financial system stability disruptions, conversion can be made to the DHE deposited in the DHE special account in accordance with the prevailing laws and regulations.”

Exporters, who have domestically deposited DHE from natural resources, can be granted taxation facilities and be designated as reputable exporters.

https://en.antaranews.com/news/289527/pp-no362023-can-increase-fer-to-us300 billion-minister

Category: Indonesia