Antara News·Indonesia·Friday, November 6, 2026 at 12:15 PM UTC

Bank Indonesia expects export retention policy to boost forex reserves

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Imamatul Silfia, Yashinta Difa

Jakarta (ANTARA) - Bank Indonesia (BI) anticipates that the mandatory retention policy for natural resource export earnings (DHE SDA) will bolster the nation's foreign exchange reserves as funds enter and circulate within the domestic financial system.

Speaking in Jakarta on Friday following a briefing on DHE SDA governance, BI Senior Deputy Governor Aida S. Budiman explained that the regulation requires export proceeds to remain onshore for a designated period.

These retained funds can be placed into various domestic financial instruments, including those managed by the central bank.

"Because the funds are retained, they remain within the banking system, and as mentioned earlier, they can also be placed with Bank Indonesia. Placing them with Bank Indonesia naturally contributes to an increase in foreign exchange reserves," Aida stated.

Aida noted that the policy's full impact on foreign exchange reserves is still in its nascent stages.

Following the regulation's September implementation, exporters are granted a grace period of up to three months to repatriate their earnings.

"Since it is a new policy, the process is just beginning. Following the September 1st implementation date, it takes three months for the funds to arrive; so, it is still an ongoing process," she explained.

Despite the transitional phase, the central bank has already observed early indicators of increased foreign currency inflows, reflected notably in rising swap transaction levels.

Looking ahead, BI projects that upcoming relaxations to the DHE SDA framework—currently being finalized by the government—will further expand foreign exchange liquidity and provide positive momentum for the Indonesian rupiah.

"Hopefully, with a larger supply, we can certainly expect the rupiah to strengthen," Aida remarked.

The government has updated provisions under Government Regulation (PP) Number 21 of 2026, marking the third amendment to PP No. 36/2023 regarding natural resource export proceeds (DHE).

Key adjustments include expanded jurisdictions, with South Korea, Japan, and the European Union added to the regions eligible for relaxed placement requirements.

Additionally, PT Bank OCBC NISP Tbk has been authorized as an official depository institution.

The updates also introduce conversion cap adjustments, featuring planned regulatory easing that will raise the maximum allowable conversion limit of export proceeds from foreign currency into rupiah from 50 percent to 100 percent.

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