Repatriation of earnings not planned<\/p>\n
JAKARTA (JP): The capital-flow monitoring mechanism being
\nprepared by the monetary authorities will not force exporters to
\nsurrender their hard currency earnings to the central bank, Bank
\nIndonesia Governor Sjahril Sabirin said on Tuesday.<\/p>\n
The government is not preparing capital controls but a
\nmechanism to better monitor the flow of foreign exchange, he
\nsaid.<\/p>\n
\"Repatriation of export earnings is not included (in the
\ndraft). Our attention focuses on better ways of monitoring
\nforeign exchange traffic,\" Sjahril told reporters after a meeting
\nwith Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita.<\/p>\n
He explained the forex monitoring plan would only be an
\nadditional measure to the requirement imposed in March on the
\nestimated 2,000 private sector debtors to report their foreign
\nborrowings to the central bank.<\/p>\n
\"We just want to keep better and more timely appraisal of the
\ninflow and outflow of foreign exchange.\"<\/p>\n
Sjahril expected the International Monetary Fund and the World
\nBank would back the central bank's plan because it would only
\ninvolve monitoring of capital flow.<\/p>\n
\"I think the IMF and WB will support the idea... It's just a
\nmonitoring plan, not a capital control.\"<\/p>\n
Separately, IMF Asia Pacific director Hubert Neiss said on
\nTuesday that he would not back any plan to force exporters to
\nrepatriate their foreign exchange earnings.<\/p>\n
\"This is a type of foreign exchange control,\" Neiss was quoted
\nby Dow Jones Newswire as saying in Singapore.<\/p>\n
\"We would not recommend that this is done because it may have
\nan adverse confidence effect and nobody knows how effective it
\nwould be.\"<\/p>\n
He believed Indonesia would not implement such a capital
\ncontrol plan.<\/p>\n
Neiss was attending the World Economic Forum's East Asia
\nEconomic Summit in Singapore.<\/p>\n
The IMF is organizing a multibillion dollar bailout package to
\nhelp finance the crisis-hit country's economic reform programs.<\/p>\n
Neiss is expected to arrive in Jakarta on Wednesday afternoon
\nfor a regular monthly review of the IMF-sponsored economic reform
\nprograms, which will likely be followed by another disbursement
\nof US$1 billion.<\/p>\n
The market presumed the government would force exporters to
\nrepatriate their earnings after a newspaper quoted Ginandjar as
\nsaying early last week that imposing a capital monitoring system
\nwas on the government's agenda.<\/p>\n
It helped the rupiah to strengthen significantly against the
\nU.S. dollar, closing at Rp 9,050 on Friday, compared to more than
\nRp 10,000 last month and Rp 15,000 in June.<\/p>\n
Meanwhile, Minister of Finance Bambang Subianto said on
\nTuesday the significant improvement in the rupiah exchange rate
\nwas generated by stronger confidence in the country, including in
\nthe government's crisis management programs.<\/p>\n
Foreign investors had responded positively to the social
\nsafety net program, bank restructuring measures and private
\nsector overseas debt restructuring program, he said.<\/p>\n
\"Without improved confidence, the rupiah will not follow the
\nregional trend,\" he told reporters after deliberations on the new
\nbanking bill with House of Representatives Commission VIII on
\nfinance and banking.<\/p>\n
Most analysts attributed the strengthening of the rupiah last
\nweek to improving sentiment in regional currencies as the dollar
\nweakened against the yen.<\/p>\n
The rupiah was trading at Rp 8,950 to Rp 9,100 to the dollar
\nlate on Tuesday. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/repatriation-of-earnings-not-planned-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}