Bank Indonesia (BI) has announced the mandatory use of rupiah for transactions within Indonesia, as of 1 July.
According to a statement from Peter Jacobs, director at the bank, the regulation “aims to enforce rupiah sovereignty within the Republic of Indonesia and simultaneously support macroeconomic stability”.
The provision excludes the following circumstances:
- transactions for the implementation of the state budget,
- international trade,
- international funding by parties, one of whom is located overseas,
- bank's business activities in foreign currencies,
- transactions of securities issued by the government in foreign currencies in the primary market and secondary market which have been specified under the law, and
- other transactions in foreign currencies performed under the law.
The BI also states that it may grant approvals to businesses that apply to keep using foreign currencies in relation to strategic infrastructure projects and other required particular characteristics, such as system adjustment, accounts and records, business strategies, and evaluations of business process and corporate finance.
Written contracts or agreements using foreign currencies made before 1 July 2015 will also remain valid until the contracts expire.
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