Indonesia tightens rules on FX export earnings

Indonesia’s government has introduced tighter controls on foreign-exchange earnings from natural-resource exports, in a move officials say is aimed at boosting domestic FX supply and supporting the rupiah. The measures focus on where export receipts are held, how long they must stay in the domestic banking system and how much can be used for day-to-day business operations.

Starting June 1, 2026, exporters of all natural resources except oil and gas must keep their export earnings in state-owned banks for at least 12 months. This requirement centralises a significant portion of commodity-related foreign-currency inflows within the state banking sector for an extended period.

Under the regulation, exporters that convert export proceeds into rupiah may use at most 50% of those proceeds for business operations. This cap is intended to limit the volume of export-derived foreign currency that is quickly turned into local currency and spent, thereby preserving FX liquidity inside the financial system.

Oil and gas shipments are covered by a different retention rule. Exporters in this segment must keep 30% of their export proceeds for a minimum of three months. The measure adds a time-bound holding requirement for a portion of oil and gas receipts without subjecting them to the 12‑month rule applied to other natural-resource exporters.

Together, the differentiated regimes for non-oil and gas resources and for oil and gas exports reshape how foreign-currency earnings from Indonesia’s key commodity sectors must be managed. The rules affect both the timing and location of export proceeds, as well as how much can be channeled into immediate corporate spending.

Authorities have outlined specific channels where foreign-currency export proceeds may be invested while they are retained. Exporters are allowed to place these funds in special instruments issued by Indonesia’s central bank or in government foreign-currency bonds.

These options provide alternatives to holding export earnings solely as deposits in state-owned banks, while still keeping the funds within instruments controlled or issued by public-sector institutions. The framework thus narrows the range of commercial uses compared with unrestricted access to foreign or domestic private markets.

S&P Global Ratings (SPGI) has cautioned that Indonesia’s plan to centrally control commodity-related export proceeds could have broader economic implications. The ratings agency said the centralisation of export proceeds and tighter controls could weigh on Indonesia’s exports and squeeze government revenues.

S&P (SPGI) also warned that the measures could affect the country’s balance of payments and create greater downside uncertainty for Indonesia’s sovereign rating. The combination of mandated retention periods, limits on rupiah-converted use and prescribed FX investment channels marks a significant shift in how export foreign exchange will be managed, with potential consequences for external accounts and fiscal dynamics.