Indonesia formulates incentives to keep FX earnings onshore – minister

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Indonesia is formulating incentives for exporters to keep their foreign exchange earnings onshore for at least three months, the chief economics minister said. | Reuters

When asked about the rationale behind the three-month holding period, Airlangga said the country needs a buffer to weather risks, including a possible global economic slowdown this year.The minister said the incentives will be laid out in a revision of a 2019 regulation that mandated exporters of natural resources keep earnings in a special account at domestic banks.

Previously, he said revisions to the regulation also contained the possibility of applying the FX rules to exporters in the manufacturing sector, and more attractive tax incentives for exporters’ special savings. Aside from the government, Indonesia’s central bank is also planning to launch a new monetary policy instrument aimed at providing exporters with better returns for domestic FX deposits, which could be launched next month.

 

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