Indonesia’s president begs exporters to bring earnings back home: finmin

JAKARTA (Reuters) – Indonesian President Joko Widodo has pleaded with exporters to bring home earnings they currently keep offshore to help manage the rupiah from falling further, the country’s finance minister said on Friday.

Repatriated earnings could help Southeast Asia’s largest economy refill its declining foreign exchange reserves, which the central bank has been using to keep the rupiah from falling too sharply amid a heavy selloff in emerging market currencies.

The president on Thursday met with executives from about 40 exporters, including Budi Hartono, the owner of cigarette maker Djarum, chief executive of Indofood Sukses Makmur (JK:) Anthony Salim and chairman of GarudaFood Group Sudhamek Agung, for two and a half hours to make his case, according to several media reports.

“We hope they keep their export earnings in Indonesia. If they have to use it to buy raw materials and imports, the FX could be used .. but we hope the rest can be kept in Indonesia and be converted to rupiah,” Finance Minister Sri Mulyani Indrawati told a press briefing.

BI in 2012 ordered exporters to receive their payments through local banks, in the hope that some of the money would stay in the country and be converted into rupiah. However, some still prefer to keep their earnings abroad.

Indrawati said BI and the government will continue to maintain close communication with the business community, while monitoring whether they need to issue new policies on the matter. She did not elaborate.

BI Governor Perry Warjiyo has repeatedly said he has no plans to implement tougher rules for export earnings.

Between February to June, forex reserves had declined $12.2 billion or about 9 percent, according to Bank Indonesia (BI) data, yet the rupiah is still down more than 6 percent in 2018. The currency was trading near its weakest level in nearly three years on Friday, at 14,460 a dollar.

The central bank said that the end-June reserves level of $119.8 billion was equal to 7.2 months of imports, higher than the international adequacy standard of 3 months of imports.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.