Indonesia issues new rules for commodity exporters as rupiah slides - trade ministry

Posted by On 5:35 AM

Indonesia issues new rules for commodity exporters as rupiah slides - trade ministry

Reuters

JAKARTA, Sept 18 (Reuters) - Indonesia has laid out new rules for commodities exporters to guarantee funding for shipments through Indonesian banks or branches of foreign banks in the country, the trade minister said on Tuesday, part of a bid to prop up the ailing rupiah.

The Indonesian currency has fallen about 9 percent versus the dollar this year, caught up in broader selling of emerging market assets.

Enggartiasto Lukita also told reporters that exporters of commodities such as palm oil and coal will be required to keep half of their proceeds onshore for a minimum of six months and convert them to rupiah.

The conversion r equirement will be regulated in a separate rules by the Finance Ministry or by the central bank, Oke Nurwan, a director general at the Trade Ministry, said.

However, the central bank said no such plans were in place. When asked about the move, Bank Indonesia Deputy Governor Mirza Adityaswara said there were currently no plans requiring exporters to keep earnings onshore and convert them to rupiah.

The regulation on letters of credit will take effect 30 days after it was ratified on Sept. 7. It will provide for some exemptions for certain export contracts but exporters who fail to fulfil the requirement may lose their export permits, the Trade Ministry regulation said.

Indonesia's central bank and government have taken or unveiled a series of moves to support the rupiah this year.

Since mid-May, Bank Indonesia has raised its benchmark interest rate by 125 basis points. President Joko Widodo has announced steps to cut impor ts, in a bid to contain the current account deficit.

On Tuesday, the rupiah strengthened to 14,850 per dollar from 14,915 before the announcement of the regulation on letters of credit and foreign exchange conversions.

Earlier on Tuesday, amid renewed pressure due to Sino-U.S. trade tension, the Indonesian currency hit 14,930 per dollar, near its weakest level since 1998.

The table below shows Indonesia's top commodity exports by value in 2017, according to data from Bank Indonesia. Amounts shown are in U.S. dollars.

1

Coal

20,445,043,740

2

Palm oils

18,512,908,040

3

Base metal products

9,493,976,080

4

Natural Gas (incl LNG)

7,994,557,790

5

Processed rubber

7,235,893,440

6

Crude oil

5,267,880,240

7

Chemicals

4,611,230,660

8< /p>

Paper and paper products

3,877,961,490

9

Processed wood products

3,756,482,560

10

Copper ore

3,439,732,010

11

Nonmonetary gold

1,880,792,110

12

Shrimp and prawns

1,543,894,230

13

Oil products

1,439,359,430

14

Coffee beans

1,175,624,770

15

Spices

568,047,960

16

Nickel ore

155,189,470

17

Cement

128,604,370

18

Tea

88,171,420

19

LPG

75,796,550

20

Bauxite

66,433,140

21

Tobacco

55,546,990

22

Cocoa beans

55,522,330


This article appears in: Politics , World Markets , Stocks , EconomySource: Google News Indonesia | Netizen 24 Indonesia

Next
« Prev Post
Previous
Next Post »