JAKARTA - The Indonesian government plans to revise Government Regulation (PP) Number 1 of 2019 concerning Export Result Foreign Exchange from Business Activities, Management, and/or Natural Resources Processing in order to harmonize export growth with foreign exchange reserves.
According to Coordinating Minister for the Economy Airlangga Hartarto, this will be done to follow up on President Joko Widodo's (Jokowi) directives while chairing a limited meeting on exports and investments at the Merdeka Palace, Jakarta, Wednesday, January 11.
"Earlier, the President's direction was that exports that have been positive so far need to be followed by increased foreign exchange reserves. Therefore, the President requested that PP 1/2019 regarding the foreign exchange for export results be improved," said Coordinating Minister Airlangga Hartarto in a post-meeting press statement quoted by Antara.
He explained that based on PP No. 1/2019 only the mining, plantation, forestry, and fishery sectors were required to fill domestic foreign exchange reserves.
"Well, we will also include several sectors, including manufacturing. Thus we will revise so of course we hope that the increase in exports and trade balance surplus will be in line with the increase in foreign exchange," said Coordinating Minister Airlangga Hartarto.
In addition to adding to the export commodity sector, he continued, the government will also further review the amount that must be included in foreign exchange reserves.
"So the number of foreign exchange, which sector, and how long he has been parking domestically," said Coordinating Minister Airlangga Hartarto.
He gave an example of a similar regulatory experience in India and Thailand which required export foreign exchange reserves to be held for at least six months, while several other countries had implemented it for up to one year.
"Even Bank Indonesia (it's only) noted, so if you record and regulate it is different. In fact, in the revision of PP 1/2019 we will arrange it so that the foreign exchange first enters, so that will strengthen our foreign exchange," said Coordinating Minister Airlangga Hartarto.
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