New BI Instruments Aim to Optimize Export Proceeds from Natural Resources
Jakarta. Bank Indonesia (BI) has introduced new financial instruments — Bank Indonesia Foreign Exchange Securities (SVBI) and Bank Indonesia Foreign Exchange Sukuk (SUVBI) — to support the government’s program mandating natural commodity exporters to retain all their foreign exchange revenues in local banks or financial markets under the DHE SDA program.
"BI fully supports the government’s efforts to optimize DHE SDA. We are preparing two new instruments: Bank Indonesia Foreign Exchange Securities and Bank Indonesia Foreign Exchange Sukuk," said BI Governor Perry Warjiyo on Wednesday.
Perry added that BI has been supporting the DHE SDA program through various foreign exchange deposit instruments provided by banks.
"These funds can then be redeposited at BI with attractive interest rates or hedged through foreign exchange swaps," he explained.
The DHE SDA policy mandates exporters to deposit 100 percent of their foreign exchange revenue from exporting natural resources commodities in Indonesia for at least one year. Previously, exporters were required to deposit at least 30 percent of their export proceeds for a minimum of three months.
According to Chief Economic Affairs Minister Airlangga Hartarto, the extended holding period for DHE SDA could boost the country’s foreign exchange reserves by up to $90 billion.
The technical regulations for this policy will be issued in the form of a Government Regulation, set to take effect on March 1. A key provision of the regulation is a 0 percent income tax rate on interest earned from DHE investment instruments. This provides a significant incentive for exporters, as the standard tax rate on interest income is typically 20 percent.
Under the new regulations, exporters storing their DHE SDA will be able to convert it into Indonesian rupiah. This conversion aims to increase the supply of dollars in the domestic market without excessive intervention from BI, thereby helping stabilize the rupiah and supporting corporate operational needs.
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