Indonesia to oblige forex savings in local banks

Bank Indonesia will issue a regulation obliging the savings of foreign exchange from exports and foreign loans in doemstic banks, according to Jakarta Post.

The regulation will be imposed to both public and private institutions.

“The regulation will be issued by the end of September. The bases are Article 10 in the BI law and the 1999 Law on Foreign Exchange Traffic and Exchange Rates,” according to BI spokesman Difi A. Johansyah.

Didi said as of July, about US$29.5 billion dollars of foreign exchange from exports and $2.5 billion dollars from foreign loans were saved in overseas banks.

He said the issuance of the new regulation was aimed at keeping the funds in the country’s financial system.
It could help strengthen Indonesia’s foreign currency liquidity, which has been hitherto depending on “hot money”, Difi said.