BI to launch forex transfer system this month<\/p>\n
JAKARTA (JP): Bank Indonesia deputy governor Miranda S.
\nGoeltom said on Thursday that a new central bank regulation will
\nbe introduced to set the minimum amount of foreign exchange that
\nwould be subject to compulsory reporting.<\/p>\n
\"It will be introduced in one or two weeks time,\" she told
\nreporters on the sidelines of a seminar.<\/p>\n
\"But don't interpret this wrongly. It is only aimed for the
\npurpose of data management and foreign exchange monitoring,\" she
\nadded.<\/p>\n
Miranda declined to specify the minimum amount of foreign
\nexchange transfer that would be subject to compulsory reporting.<\/p>\n
A source at the central bank said Bank Indonesia has yet to
\nset a minimum amount.<\/p>\n
\"We're still discussing it,\" he told The Jakarta Post.<\/p>\n
He added that although the central bank has introduced the
\nruling, more time was needed for the full implementation of the
\nsystem.<\/p>\n
The House of Representatives passed a bill in April that
\nempowers Bank Indonesia to monitor the flow of foreign currency
\nexchange, by requiring all transfers of capital in and out of the
\ncountry to be reported.<\/p>\n
The forex monitoring system is deemed necessary to help avoid
\na currency crisis, such as the one that hit the country in August
\n1997.<\/p>\n
The law on forex flow stipulates that every person or legal
\nentity within the country is required to inform banks, or other
\nparties appointed by Bank Indonesia, about the transfer or flow
\nof foreign currency or rupiah to or from the country when it is
\nabove a certain amount.<\/p>\n
The minimum transfer amount to require reporting would be set
\nby a central bank regulation.<\/p>\n
Several Bank Indonesia officials have said that deciding on
\nthe minimum amount is a challenge, pointing out that if the
\nminimum amount is set too low it would be cumbersome, but if it
\nis set too high many transactions would not be reported.<\/p>\n
\"At the initial stage, the reporting system would be paper-
\nbased, so if the minimum amount is set too low the paperwork will
\nbe huge,\" said one official.<\/p>\n
Meanwhile, the source at the central bank said that making a
\ndecision about the minimum amount had become more challenging as
\nseveral key economic ministers were trying to interfere.<\/p>\n
\"This will be a test case for Bank Indonesia's newly acquired
\nindependence,\" the source said.<\/p>\n
Meanwhile, Miranda reaffirmed at the seminar that Indonesia
\nwould not adopt a fixed exchange rate system for the rupiah, due
\nto a lack of foreign currency reserves and huge overseas debt
\nlevel.<\/p>\n
\"The burden of overseas debt is so heavy and the amount of
\nforex reserves is relatively small,\" Miranda said.<\/p>\n
Bank Indonesia's net foreign exchange reserves stood at around
\nUS$16.2 billion, while the country's total foreign debt exceeds
\n$150 billion.<\/p>\n
Several economists, including those from opposition parties,
\nhad called on the need to fix the exchange rate of the rupiah to
\nthe U.S. dollar in order to stabilize the local currency.<\/p>\n
Indonesia abandoned its managed floating rate system in August
\n1997 and adopted a free float system in the wake of the currency
\ncrisis that started in Thailand.<\/p>\n
The rupiah plunged to its lowest level of Rp 17,000 to the
\ndollar last year, compared to Rp 2,400 before the crisis started.
\n(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-to-launch-forex-transfer-system-this-month-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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