Fathan Qorib, Yanuar Pribadhie
In an effort to strengthen the rupiah, the Government is asking exporters to place their export proceeds (Devisa Hasil Ekspor/DHE) in domestic banks. As explained by Hatta Rajasa, Coordinating Minister for Economic Affairs, the value of Indonesian exports currently stands at USD 1.5 billion per month.
“If DHE was placed in domestic banks, rupiah stability may be achieved,” says the Minister.
Agus DW Martowardojo, Governor of Bank Indonesia, welcomed this idea and agrees that this measure will also strengthen domestic banks. The Governor also expressed his appreciation to exporters who are willing to do so.
“Nowadays, exporters are showing their commitment to report their activities periodically. We hope that the number of exporters who place their DHE in domestic banks will increase,” said Agus.
However, there remains some obstacles in implementing the proposal. Sigit Pramono, Chairman of the Indonesian Bank Association (Perbanas), says that legal uncertainty is the primary cause of the reluctance of exporters to place DHE in national banks. An often cited example is the frustrating settlement procedures related to breach of contract cases in Indonesia.
“Legal proceedings in Indonesia usually take too much time. This uncertainty will hamper businesses,” said Sigit.
According to Sigit, these factors result in most commodity transactions between exporters choosing another country’s law to govern their contracts such as Singaporean or Malaysian law.
“That is why DHE for CPO (Crude Palm Oil) is deposited in Singapore. Buyers request the use of Singaporean law instead of Indonesian law,” says Sigit.
(hot/kc)
Fathan Qorib, Yanuar Pribadhie
In an effort to strengthen the rupiah, the Government is asking exporters to place their export proceeds (Devisa Hasil Ekspor/DHE) in domestic banks. As explained by Hatta Rajasa, Coordinating Minister for Economic Affairs, the value of Indonesian exports currently stands at USD 1.5 billion per month.
“If DHE was placed in domestic banks, rupiah stability may be achieved,” says the Minister.
Agus DW Martowardojo, Governor of Bank Indonesia, welcomed this idea and agrees that this measure will also strengthen domestic banks. The Governor also expressed his appreciation to exporters who are willing to do so.
“Nowadays, exporters are showing their commitment to report their activities periodically. We hope that the number of exporters who place their DHE in domestic banks will increase,” said Agus.
However, there remains some obstacles in implementing the proposal. Sigit Pramono, Chairman of the Indonesian Bank Association (Perbanas), says that legal uncertainty is the primary cause of the reluctance of exporters to place DHE in national banks. An often cited example is the frustrating settlement procedures related to breach of contract cases in Indonesia.
“Legal proceedings in Indonesia usually take too much time. This uncertainty will hamper businesses,” said Sigit.
According to Sigit, these factors result in most commodity transactions between exporters choosing another country’s law to govern their contracts such as Singaporean or Malaysian law.
“That is why DHE for CPO (Crude Palm Oil) is deposited in Singapore. Buyers request the use of Singaporean law instead of Indonesian law,” says Sigit.
(hot/kc)