Dollar purchases from SOEs to be regulated

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.