Govt drafts new bill to monitor forex transfers
Govt drafts new bill to monitor forex transfers
JAKARTA (JP): The government plans to strictly monitor the
flow of foreign exchange by requiring all transfers of capital in
and out of the country to be reported, according to a new draft
law.
The Foreign Exchange Traffic and Exchange Rate System Bill, a
copy of which was obtained by The Jakarta Post, will be submitted
by the government to the House of Representatives for
deliberation early next month, a source said.
The bill stipulates that every "person or legal body within
the region of Indonesia is required to inform banks or other
parties appointed by Bank Indonesia about the transfer or moving
of a certain amount of foreign currency or rupiah to or from the
country."
The bill does not give a figure for the minimum amount of
money transferred that should be reported to the government.
The "moving" of capital means the act of bringing either the
foreign currency or rupiah, in cash, into or out of the country.
Each report should cite the amount of the transfer, the type
of foreign currency, the purpose of the transfer and the source
of the revenue, names of receiving and sending parties, and the
countries of origin and destination of the money.
The appointed banks or related parties must report to the
central bank immediately.
The bill also stipulates that the government will determine
the system of exchange rate to be applied after consulting with
Bank Indonesia.
The government will choose between the fixed, free or managed
floating exchange rate systems, according to an explanation of
the draft law.
The central bank will be responsible for the implementation of
the exchange rate system.
At the dawn of the monetary crisis in mid 1997, the government
free floated the rupiah's exchange rate after decades of a
controlled floating currency, a move said by many to have further
damaged the economy.
If passed, the bill would replace the current 1964 foreign
exchange law.
Since 1970, Indonesia has applied a free foreign exchange
system, which allows every person or legal body to freely own,
transfer or use foreign currency in transactions. (das)