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Indonesian president: New export measures will add $80 billion to foreign exchange reserves

The Indonesian president Prabowo Subito signed a regulation on Monday requiring that exporters of non-oil and gas resources hold their proceeds in Indonesia for at least one year. He said this would add an additional $80 billion to Indonesia's foreign exchange reserves.

Prabowo said in a press conference televised that Indonesia's natural resources should benefit the nation and its people through development funding and money flowing domestically. He also emphasized the importance of increasing foreign exchange reserves, and stabilizing the exchange rate.

President said that the new measure would take effect on March 1.

Since 2023, Indonesia requires all resource exporters keep 30% of proceeds from each export with a shipping documents worth at least $250,000. However, Prabowo stated that exporters prefer to keep their earnings outside Indonesia.

Prabowo stated that under the new regulation exporters can use the proceeds for dividend payments, the purchase of raw materials, or the repayment of loans.

According to the rule of 2023, oil and gas exporters are only required to keep 30% onshore.

Airlangga hartarto, his chief economist, had announced many of the details about Prabowo's regulation.

Airlangga said last month that the central bank will continue to offer exporters instruments to deposit their funds, and the government will remove taxes on the capital gains of such deposits. (Reporting and editing by Ananda Teresia; Gayatri Suroyo; Fransiska Nanangoy)

(source: Reuters)