Safeguarding foreign exchange, sustaining export competitiveness

Jakarta (ANTARA) - Indonesia has a strong external buffer. However, its external resilience still depends on its ability to generate new foreign exchange earnings.

Foreign exchange already earned must be managed productively without undermining the capacity of export sectors to generate further inflows.

Bank Indonesia reported that Indonesia's foreign exchange reserves stood at US$146.3 billion at the end of September 2026, equivalent to 5.3 months of imports, or 5.2 months of imports and government external debt repayments.

This level exceeds the international adequacy benchmark of around three months of imports, indicating a relatively strong external position.

This gives Indonesia room to take a more strategic approach to its policy on Foreign Exchange Proceeds from Natural Resource Exports (DHE SDA).

The objective should not be limited to keeping these proceeds in the country. It should also ensure that they benefit the broader economy without disrupting the liquidity of exporting businesses.

Balancing these objectives requires DHE SDA management to take business continuity into account.

Export-oriented companies still need sufficient flexibility to maintain production, invest, purchase capital goods and raw materials, and expand into new markets.

Productive retention

The DHE SDA policy is an instrument for managing foreign exchange that has already been earned. Government Regulation No. 21 of 2026 governs the placement of export proceeds, including through Article 18A, which provides an alternative arrangement for eligible mining exporters.

Exporters using this facility may place at least 30 percent of their export proceeds for a minimum of three months. Non-oil and gas mining exporters that do not use the facility remain subject to the requirement to place 100 percent of their export proceeds for 12 months.

The flexibility provided under Article 18A creates room for greater domestic use of foreign exchange while taking businesses' liquidity needs into account.

Susiwijono Moegiarso, secretary of the Coordinating Ministry for Economic Affairs, said the policy was intended to strengthen macroeconomic stability and deepen domestic financial markets, while creating opportunities to finance investment and working capital.

Permitted uses of DHE include payments of obligations to the government, procurement of goods and services, including capital goods, loan repayments, and working capital.

Under the latest provisions, Bank Indonesia has also added the option of placing export proceeds in foreign-currency-denominated government bonds (SUN) and/or government sharia securities (SBSN) issued by the government in the domestic primary market.

These options allow export proceeds held domestically to continue supporting productive activities. If used effectively, DHE can strengthen foreign exchange liquidity, support business financing, and deepen domestic financial markets.

The benefits, however, depend on whether exporters have the certainty and flexibility they need. Companies that earn foreign exchange still require it to purchase machinery and raw materials, pay suppliers and meet other obligations, and maintain daily operations.

DHE management should therefore be assessed by its economic benefits, not merely by the amount of foreign exchange held domestically. Arrangements that support financing without adding to businesses' operating burdens would better serve the goal of maintaining export competitiveness.

Strengthening the source

Trade data underscore the importance of strengthening Indonesia's export capacity. Statistics Indonesia (BPS) reported that exports grew 4.74 percent year on year to US$193.64 billion in January-August 2026, while imports rose 19.84 percent to US$186.39 billion. The country recorded a trade surplus of US$7.25 billion.

Non-oil and gas exports increased 5.48 percent to US$185.63 billion, while non-oil and gas imports rose 16.83 percent to US$157.09 billion. The overall surplus comprised a US$28.54 billion surplus in the non-oil and gas sector, offset by a US$21.29 billion deficit in oil and gas trade.

The faster growth in imports does not, by itself, indicate declining export competitiveness, as imports are also driven by domestic demand, investment, and demand for raw materials and capital goods.

Nevertheless, the gap between export and import growth highlights the importance of expanding export capacity so that rising import demand is accompanied by stronger foreign exchange earnings.

Strengthening that capacity requires not only more competitive production but also better information on prices, destination markets, and trade flows.

Such information becomes increasingly important as Indonesia seeks to capture greater value from commodities it already exports. In this context, PT Danantara Sumberdaya Indonesia (DSI) could help strengthen the country's trade intelligence capabilities.

In just over two months since beginning operations on June 1, 2026, DSI had analyzed approximately 6,500 export declarations worth more than US$14 billion, covering over 90 million metric tons of commodities.

The activity covered more than 50 loading ports across 25 provinces, with shipments destined for more than 100 countries.

DSI integrates national export data with global market references, including information on prices, volumes, quality, Harmonized System classifications, cargo vessels, and destination markets. This database provides a more comprehensive picture of trade flows and the value of Indonesia's strategic commodities.

Initial analysis by DSI, conducted with several state-owned enterprises, indicates potential value optimization of around US$5 billion annually. This figure represents an estimate based on preliminary analysis, not additional foreign exchange earnings already realized. The economic benefits will depend on follow-up action at the policy and business levels.

DSI's strategic value therefore lies not simply in the volume of data it collects. More importantly, it lies in the ability to turn trade intelligence into actionable insights that identify opportunities to increase export value through price analysis, destination-market mapping, trade-pattern analysis, and improvements across the export value chain.

Such information still needs to translate into action in the real economy.

Eddy Junarsin, an economist at Gadjah Mada University (UGM), has emphasized that stronger export performance requires effective resource management, competitive products, market access, export-market mapping, and strategies to navigate global markets.

Ultimately, stronger exports require more than the ability to identify trade opportunities. That information must translate into higher productivity, greater value added, investment, and broader market access to increase Indonesia's foreign exchange earnings.

*Martha Herlinawati Simanjuntak is a journalist at the ANTARA News Agency

Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of the ANTARA News Agency.

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