Indonesia may introduce new letter of credit (L/C) requirements alongside new rules for commodities exporters to guarantee funding for shipments through Indonesian banks or branches of foreign banks in the country, trade minister Enggartiasto Lukita has said.

However, a senior central bank officer appears to be unaware of the minister's plans.

Currency prop

Lukita says he is introducing a raft of new measures in the government's bid to prop up the ailing rupiah.

The Indonesian currency has fallen about 9 per cent versus the US dollar this year.

Export requirements

Lukita has said that exporters of commodities such as palm oil and coal will be required to keep half of their proceeds onshore for a minimum of six months and convert them to rupiah.

If employed, the L/C requirements will likely be used to ensure that export earnings are kept onshore.

Central bank unaware

However, a central bank official said no such plans were in place. When asked about the move, Bank Indonesia deputy governor Mirza Adityaswara said there were currently no plans requiring exporters to keep earnings onshore and convert them to rupiah.

Earlier this month Indonesia said it wants the country's power generators and refineries to pay for imports on L/C terms as part of the government's efforts to reduce imports and support the flagging rupiah (DC World News, 14 September 2018).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.