Jakarta. Bank Indonesia has expanded the range of foreign currencies allowed for the placement of export earnings from natural resource commodities, permitting exporters to deposit funds in currencies other than the US dollar at state-owned banks.

The move is intended to provide greater flexibility for export revenues entering Indonesia’s financial system.

Bank Indonesia Governor Perry Warjiyo said on Thursday that the broader currency framework is part of the central bank’s support for the government’s policy requiring natural resource export earnings to be retained domestically.

The policy also aims to encourage currency diversification and reduce reliance on the US dollar in international trade transactions.

“We are expanding the range of currencies. Previously, it was only the US dollar, but now we are allowing other currencies as well,” Perry said.

He said one of the currencies already being used for domestic transactions is the Chinese yuan.

According to Perry, Bank Indonesia has continued deepening the foreign-exchange market, including through local currency transaction cooperation with China.

“Chinese yuan transactions are now already taking place domestically,” Perry said.

He added that local currency transaction cooperation between Indonesia and China has become the largest among Indonesia’s bilateral currency arrangements.

Last year, the value of such transactions exceeded $25 billion, while this year the monthly transaction value has already reached around $3.7 billion, Perry said.

The policy comes as Indonesia seeks to strengthen management of export earnings from strategic commodities while improving domestic financial system liquidity and limiting exposure to global dollar volatility.

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