Economist: DHE SDA Policy Adds Layer of External Resilience for Indonesia

Economist Yusuf Rendy Manilet of the Center of Reform on Economics (CORE) said the government’s new policy on foreign exchange from natural resource exports (DHE SDA) serves as an additional layer of external resilience for Indonesia.

“This policy can strengthen domestic foreign exchange liquidity, aid market stabilisation, and provide greater breathing room for the financial system,” he said.

He said the move aligns with the government’s efforts to maintain US dollar availability domestically amid pressure on the rupiah’s exchange rate and ongoing global economic uncertainty.

Yusuf noted that previously, most DHE did not remain in the domestic financial system for long, as it was immediately converted to rupiah or used for other purposes. This resulted in relatively limited dollar supply in the domestic market.

In this context, he argued that the policy’s primary benefit lies not in directly increasing national foreign exchange reserves, but in boosting dollar liquidity within the national banking system.

With greater foreign exchange liquidity, the domestic financial market is better equipped to absorb external shocks, while banks gain enhanced access to US dollar funding.

Yusuf also highlighted another potential benefit: using DHE funds as loan collateral. This scheme allows exporters to maintain liquidity flexibility while banks can extend financing with more manageable risks.

“If idle funds can be used as collateral for working capital financing, exporters retain liquidity flexibility while banks gain opportunities for credit expansion with relatively low risk. It is at this stage that liquidity begins to transform into productive economic activity,” he explained.

Additionally, tax incentives prepared by the government are expected to encourage exporters to retain funds longer domestically, thereby strengthening national foreign exchange supply.

However, Yusuf noted that the policy’s effectiveness still depends on the financial system’s ability to channel this liquidity into productive sectors.

This is to ensure that stored funds not only bolster market stability but also drive economic activity and value creation.

“Therefore, I view the DHE policy as an additional layer of external resilience for Indonesia, not a standalone solution,” he concluded.