BI: DHE Conversion Increases, Strengthens Exchange Value Stability

JAKARTA Bank Indonesia (BI) recorded positive developments in the placement of Export Result Foreign Exchange (DHE), especially regarding the increasing conversion of DHE into rupiah.

Head of the BI Department of Economic Policy and Monetary Firman Mochtar explained that DHE is still large, along with the growing national export prospects.

He added that the conversion of DHE to rupiah has also increased, which has a positive impact on the number of foreign currencies in domestic storage.

Even the positive development of the conversion from DHE also increased, so the money received was exchanged into the rupiah. If the money is exchanged, it means that there is an additional dollar supply. If the dollar supply increases, it means that the demand for a sign of the rupiah will increase. That's why our exchange rate is also strengthened," said Firman in a Media Taklimat entitled 'Keeping Stability, Encouraging Economic Growth', Thursday, July 24.

He also added that strengthening the DHE policy since its enactment on March 1 has had a real impact on the stability of foreign exchange rates and supply of foreign exchange.

"So this DHE, which was strengthened last March 1, has a positive impact on additional supply," he said.

In line with that, Head of the BI Monetary and Securities Management Department Erwin Gunawan Hutapea revealed that after the issuance of government regulations (PP) regarding the conversion of DHE, activities in foreign exchange markets experienced a significant increase.

"Since the conversion PP was allowed. We see on daily basis, yes. The foreign exchange market transaction has increased by approximately one billion US dollars," he added.

He added that increasing the supply of US dollars from DHE was very helpful in maintaining exchange rate stability and several exporters had even actively sold foreign exchanges in the market.

"So there are indeed many exporters who are because of their needs and that is included in the things that are allowed by the PP to allow for the conversion they are selling and with the supply of DHE, this really helps our efforts to maintain stability. Adding one billion US dollars is not bad," he explained.

He hopes that this trend will continue and with the decline in import rates from 32 percent to 19 percent, this gives a positive signal and can strengthen the supply of DHE in the market.

"Especially with the tariff agreement that fell from 32 (percent) to 19 (percent). We hope that later the supply from DHE in our conversion market will continue to survive. We even hope that it will continue to increase," he concluded.