Imposes restrictions on foreign exchange earnings from natural resource exports

On 17 February 2025, the Government of Indonesia issued Regulation No. 8 of 2025, mandating the retention of foreign exchange earnings from natural resource exports within the domestic financial system. Under the new regulation, exporters in the mining (excluding oil and gas), plantation, forestry, and fisheries sectors are required to deposit 100% of their export proceeds in a special account for 12 months. Previously, only 30% of export earnings had to be retained for three months. The special account must be held at either the Indonesian Export Financing Institution or at banks approved by the Financial Services Authority to manage foreign currency transactions—excluding branches of foreign banks operating in Indonesia. While the regulation restricts offshore holding of export proceeds, exporters are allowed to use the retained funds for specific purposes, including converting to Indonesian Rupiah at the same foreign exchange bank, payments in foreign currency for tax and non-tax state revenue, distributing dividends in foreign currency, procuring raw materials and capital goods, and repaying foreign currency loans. The regulation came into effect on 1 March 2025.

• Type:

  • Treatment and operation (Capital transfer and FOREX)

• Industry:

  • Primary (Agriculture, forestry and fishing, Mining and quarrying)

• Sources:

  • Lexology, Indonesia Updates Rules for Foreign Currency from Natural Resources Exports with New Regulation, https://www.lexology.com/library/detail.aspx?g=f07144bd-438d-48d7-b442-5bd3c9f43c32#:~:text=Under%20the%20New%20Regulation%2C%20exporters,a%20minimum%20of%20three%20months., 14 Mar 2025
  • Cabinet Secretariat of The Republic of Indonesia, Gov’t Issues New Regulation on Foreign Exchange Retention Read more: https://setkab.go.id/en/govt-issues-new-regulation-on-foreign-exchange-retention/, https://setkab.go.id/en/govt-issues-new-regulation-on-foreign-exchange-retention/, 17 Feb 2025
  • Official legislation portal, Amendment to Government Regulation Number 36 of 2023 concerning Foreign Exchange from Export Proceeds from Business Activities, Management, and/or Processing of Natural Resources, https://peraturan.bpk.go.id/Details/314625/pp-no-8-tahun-2025, 17 Feb 2025