Foreign Banks Block US Dollar Withdrawals at Indonesian ATMS
Foreign lenders including Citigroup and HSBC have blocked customers from withdrawing US dollars from their Indonesian automated teller machines, a move intended to comply with a Bank Indonesia ruling that aims to protect the rupiah.
“Citi has stopped providing service for dollar ATM withdrawals since Aug. 6, 2012, as per Bank Indonesia’s regulation,” Citibank Indonesia spokeswoman Mona Monika told the Jakarta Globe on Tuesday.
Citibank ATMs now carry a notice informing customers that they will need to visit a branch of the bank in order to withdraw dollars.
“Our customers with dollar accounts are still able to withdraw dollars directly through teller service at our branches. This withdrawal will not be charged up to the ATM withdrawal limit,” Mona said. The previous ATM withdrawal limit was $500 or $1,000 a day, depending on the customer’s card limit, she said.
Mona said that despite the central bank ruling officially commencing in March, Citibank needed time to make the necessary adjustments.
London-based HSBC issued notification of a similar policy. “Effective from September 1, 2012, US dollar cash withdrawal service through HSBC ATMs throughout Indonesia will be terminated,” HSBC said in a statement.
Bank Indonesia announced in March that lenders would no longer be allowed to provide dollar-note withdrawals via ATMs. The rule requires customers to provide underlying documents for some foreign exchange transactions. It also limits the amount of foreign currency that can be bought for speculative purposes to $100,000 a month.
The move is another step by the central bank to arrest the decline in the rupiah, which has weakened 4.5 percent so far this year against the dollar, in line with the country’s deteriorating exports. Indonesia’s goods trade has been in the red for three straight months and posted a record $1.5 billion deficit in June.
Bank Indonesia has been trying to boost onshore foreign-exchange liquidity by requiring all proceeds from exports be placed in local bank accounts.
The central bank is also mulling a plan to relax requirements on foreign exchange transactions in order to attract more foreign money to the country.
The rupiah traded at 9,472 against the dollar on Tuesday, compared with 9,461 on Monday, according to data from Bank Indonesia.