Minister Airlangga Hartarto said the government will offer"competitive" interest rates for exporters that deposit their FX earnings in local banks.
"We have to make [interest rates] competitive compared to Singapore, so that [FX earnings] won't flow to Singapore," he said, referring to the city-state's appeal as a regional financial hub. He did not provide details on the proposed rates or the timeline of implementation.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.
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. - Reuters