Dollar purchases from SOEs to be regulated

The Jakarta Post Jakarta

The Office of the State Minister for State Enterprises is formulating a scheme with Bank Indonesia to manage and control the purchase of dollars by state companies in a bid to help support the ailing rupiah.

State Minister for State Enterprises Laksamana Sukardi said on Friday better management of dollar purchases was necessary in relation to state firms' huge need of dollars to finance imports and debt payments.

"We will formulate a foreign exchange management scheme, probably by introducing a system allowing state companies to purchase dollars on a daily basis (to cover their monthly needs)," Laksamana said.

Laksamana did not elaborate further, saying the details were still being worked out.

The rupiah has fallen victim to pressure stemming from both external factors, including soaring oil price and the renewed strength of the dollar, and internal ones such as political concern and currency speculation. The rupiah has depreciated by double digits so far this year, erasing the 7 percent gain it booked in 2003.

The rupiah's shaky showing has been also attributed to the huge purchases of dollars by corporations, including state companies. This has raised concern that state companies are engaging in currency speculation.

However, Laksamana said the dollar purchases were routine actions by the firms to cover their expenses for imports and debt repayments.

According to Laksamana, among the state-owned companies that routinely buy a huge amount of dollars are oil and gas company Pertamina, which requires dollars to cover crude and fuel imports, and electricity firm PT PLN, which needs the greenback to pay for power generated by independent power producers.

"Pertamina alone needs some US$800 million per month," Laksamana said.

Asked about the impact on state firms of rising oil prices and the dollar's increased strength, Laksamana said some companies had suffered but others had profited.

Companies with incomes in U.S. dollars such as airport operator Angkasa Pura and state gas distribution firm Perusahaan Gas Negara have booked higher incomes on the strength of the dollar.

Companies that have been hit by rising oil prices and the stronger dollar have no alternative but to revise their financial projections, Laksamana said.