Rupiah and Foreign Currency Credit and Transaction Limits

Bank Indonesia (BI) has issued Regulation No. 7/14/PBI/2005 on transaction and credit limits for Rupiah and foreign currencies in Indonesia. Generally, the Regulation has been issued to ensure implementation of monetary policy, to facilitate and simplify payment systems, and to protect the stability of the Rupiah.

Essentially, the Regulation places severe limitations on the types of transactions and credit facilities that banks may provide to foreign interests or parties. These limitations include restrictions on transfer to accounts held by foreigners in both Rupiah and foreign currencies both domestically and internationally, the provision of credit facilities, and the trade in commercial paper. However, there is an extensive list of exceptions to the restrictions included in this Regulation.