OJK Denies Foreign Banks Are Pulling Funds From Indonesia

OJK Denies Foreign Banks Are Pulling Funds From Indonesia

Jakarta. Indonesia’s Financial Services Authority (OJK) has rejected reports that foreign banks are withdrawing funds from the country due to concerns over government policies, saying the transfers represent routine profit repatriation rather than a loss of investor confidence.

The clarification follows a Bloomberg report published on June 29, which said units of Citigroup, Standard Chartered, and HSBC had transferred around Rp 11.5 trillion (about $640 million) out of Indonesia over the past two years. Citing people familiar with the matter, the report said the outflows were driven by concerns over the direction of the Indonesian government’s policies.

Dian Ediana Rae, OJK’s executive head of banking supervision, dismissed the claim, describing it as an exaggerated interpretation of a normal investment practice.

“That is an overstatement. It is simply not true,” Dian told reporters at Indonesia’s parliament complex on Wednesday.

“When investors earn profits from their investments in Indonesia, it is natural for them to transfer those profits back to their home countries.”

He said foreign investors who commit significant capital to Indonesia are entitled to repatriate their earnings, adding that such transactions should not be interpreted as capital flight.

Dian said that Indonesia operates under a free foreign exchange regime established by the 1999 Foreign Exchange and Exchange Rate Law, which allows investors to move profits abroad in accordance with prevailing regulations.

He also emphasized that cross-border fund transfers by banks remain subject to regulatory oversight. The amount, timing, and mechanism of the transfers are monitored and carried out under OJK’s supervision and approval.

“Even the amount being transferred, the timing, and the stages of the process are regulated and carried out with our approval,” Dian said.

According to Dian, profit repatriation by foreign investors has long been a normal feature of Indonesia’s investment landscape, including since international banks began operating in the country decades ago.

“There is nothing unusual about it. This has been standard practice since foreign banks started investing in Indonesia in the 1960s,” he said.

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