Low Compliance for Central Bank’s Rule on Indonesian Export Income
Thomas E. Harefa
Exporters have yet to abide by a new rule to deposit their income in Indonesian bank accounts, even as the central bank’s deadline to do so approaches.
Bank Indonesia reported on Monday that only half the country’s export income had been placed in Indonesian bank accounts. Should companies fail to report their export earnings by next Monday, the central bank will fine them.
The central bank’s rule, effective from Jan. 2, required Indonesian exporters to place their income into local accounts within six months of receiving it.
January’s export earnings of $14.6 billion have to be placed in domestic banks by early next month, but so far only $7.4 billion have been placed in the banks.
“There are around 2,600 exporters that have yet to comply,” Hendy Sulistiowati, executive director of the economy and monetary statistics at the central bank, said on Monday.
Starting Monday, noncompliant companies will be fined 0.5 percent of their foreign exchange income, with the minimum amount set at Rp 10 million and the maximum at Rp 100 million, Hendy said.
If companies refuse to pay the fine, she added, their exports will be delayed by customs until they pay.
The central bank’s new rule is part of its bid to stabilize the value of the rupiah, which has been hit in recent weeks. It is also intended to help the country’s financial system weather an external crisis by boosting foreign exchange liquidity at home and reducing the economy’s vulnerability to a sudden reverse flow of “hot money.”
However, Fadhil Hasan, the executive director of the Indonesia Palm Oil Producers Association (Gapki), claimed there was low compliance because the central bank had not done enough to communicate the rule to businesses.
“There are still few instruments in local banks to place the money,” he added.
Still, Robiyanto Koestomo, the head of agriculture, forestry and mining at the Indonesian Exporters Association (GPEI), supported the rule, saying that because most of Indonesia’s exports were its natural resources, “the income should come back here.”
Ryan Kiryanto, chief economist at state lender Bank Negara Indonesia, said local banks had to provide incentives to encourage exporters to place their money here, such as exchange hedging instruments.
He also lauded the central bank’s recent initiative introducing foreign exchange term deposits as instruments for banks to place the foreign exchanges.