Economist: PFII Must Be Designed to Retain Dollar Circulation Domestically

Jakarta (ANTARA) - Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian has stated that the planned International Financial Centre (PFII) must be designed to keep US dollar circulation within the country. In a written statement on Sunday, Fakhrul assessed that the discussion of the PFII Bill is a strategic step to strengthen Indonesia’s competitiveness as an investment destination and deepen the national financial sector. However, he noted that the success of the PFII should not only be measured by the amount of foreign capital entering, but also by Indonesia’s ability to ensure that foreign exchange funds remain within the domestic financial system. “As long as the dollar loop occurs more overseas, domestic foreign exchange liquidity will remain thin and the exchange rate will be more vulnerable to global turmoil,” Fakhrul said. He mentioned that a key problem for many countries is preventing export earnings, resident savings, and investment funds from continuously flowing to overseas financial centres. Fakhrul cited South Korea as an example of a country facing similar challenges in attracting and retaining dollar liquidity domestically. Therefore, he said, South Korea continues to push for foreign exchange market reform and the development of Seoul as an international financial hub so that more global financial activities can be conducted from within the country. In this context, Fakhrul believes the PFII has a significant opportunity to enhance Indonesia’s regional competitiveness if it can build a credible international financial ecosystem. He stressed that the PFII should become a venue for exporters, institutional investors, pension funds, sovereign wealth funds, and global investors to store funds, conduct financing, hedging transactions, and trade financial instruments from Indonesia. “The PFII should be part of a grand strategy to build a domestic dollar ecosystem. When export earnings, resident savings, and investment funds can continuously circulate within Indonesia, exchange rate stability will be stronger, funding costs more efficient, and national economic resilience will increase,” he said.