
Bank Indonesia said the implementation of rules requiring export proceeds from natural resources to be retained domestically could add to Indonesia’s foreign-exchange reserves and support the rupiah. The government has expanded the list of export destinations eligible for relaxed placement requirements to include South Korea, Japan, and the European Union.
Keeping more export earnings in domestic banks or at the central bank can increase foreign-currency availability and support the rupiah, potentially lowering the local-currency cost of imported feed and inputs. The currency effect depends on how much proceeds exporters actually place domestically.
Not enough comparable past events yet for a historical read.
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