Indonesia has introduced a new requirement for exporters of natural resources to park their foreign exchange earnings domestically, a move Finance Minister Purbaya Yudhi Sadewa says will strengthen the rupiah.
The policy mandates that foreign exchange proceeds from natural resource exports (DHE SDA) be deposited in state-owned banks, aiming to increase domestic liquidity and reduce pressure on the local currency.
Purbaya expressed optimism that the measure would lead to a stronger rupiah, signaling a shift toward more direct intervention in the foreign exchange market.
By channeling export revenues into state-owned financial institutions, the government seeks to bolster the supply of foreign currency within the domestic banking system, potentially easing the need for central bank intervention to defend the currency.
The move comes as emerging market currencies face ongoing volatility amid shifting global risk sentiment.
While the specific mechanics of the mandate were not detailed in initial reports, the policy aligns with broader efforts by emerging economies to manage capital flows and stabilize their currencies.