Exporters spared selling dollars to BI<\/p>\n
JAKARTA (JP): Bank Indonesia will not require the country's
\nexporters to sell their U.S. dollar revenue to the central bank
\nin an effort to bolster the beleaguered rupiah, its director said
\nyesterday.<\/p>\n
Dono Iskandar, speaking following the launching of the
\nIndonesian Debt Restructuring Agency (INDRA), said use of such a
\nrequirement would only deplete foreign investors' confidence in
\nthe country.<\/p>\n
The government will keep its free foreign exchange regime
\nbecause alterations would not provide any benefit, he explained.<\/p>\n
\"We already have experience with a closed forex regime. The
\nresult was not encouraging because there were many leakages
\nthrough over-invoicing and under-invoicing.\"<\/p>\n
Over invoicing is a markup in the value of imports; under-
\ninvoicing is the opposite through reporting a lower export value
\nthan what is realized.<\/p>\n
Chairman of the Indonesian Chamber of Commerce and Industry
\n(Kadin) Aburizal Bakrie asked President B.J. Habibie last week to
\nrequire exporters to sell their dollars to BI to boost the
\ncountry's foreign exchange reserves and resuscitate the ailing
\nrupiah.<\/p>\n
He contended the government would easily raise US$50 billion
\nannually through the mechanism, pointing to the country's monthly
\nexport value of between $3.5 billion and $4.5 billion.<\/p>\n
The rupiah has been under severe pressure over the past year,
\nplunging to about Rp 13,000 to the U.S. dollar last week from Rp
\n2,450 in the precrisis period in July.<\/p>\n
The currency crisis has caused severe difficulties to the
\neconomy as most industrial raw materials are imported. Many
\ncompanies are now technically bankrupt due to high overseas debt.<\/p>\n
The government expects the rupiah to strengthen to about Rp
\n10,000 by the end of this year, following the agreement by
\nforeign donors late last month to provide the country with more
\nthan $14 billion in foreign aid.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita said in Paris last week following the
\nmeeting with the Consultative Group on Indonesia creditor
\ncountries that part of the foreign aid would be used to buy
\nrupiah from the market to finance various government programs.<\/p>\n
Dono also said that if the INDRA debt restructuring scheme
\nworks, pressure on the rupiah would diminish as the massive $34
\nbillion debt due this year would be stretched over eight years,
\nincluding a three-year grace period. (rei)<\/p>",
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"sponsor": "Okusi Associates",
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