Recently, the Indonesian government has introduced a new regulation requiring natural resource exporters such as mining, planting, forestry, and fisheries to retain all their foreign exchange earnings in Indonesia for at least one year. This measure aims to enhance the foreign exchange reserves of the Central Bank of Indonesia and is expected to increase80 billion US dollars and effectively curb the continuous depreciation trend of the Indonesian rupiah.

Indonesian President Prabowo stated that this move is aimed at optimizing the country's natural resource revenue, promoting domestic economic development, increasing foreign exchange reserves, and strengthening the exchange rate of the Indonesian rupiah. He pointed out that in the past, most of the funds were stored in overseas banks, and now the government hopes to take this opportunity to keep these funds domestically to support the country's long-term development.

According to the new regulations, affected exporters can use foreign exchange earnings to pay dividends, taxes, loans, and other obligations, as well as to purchase raw materials, capital goods, and other materials that cannot be obtained locally in Indonesia. However, this regulation does not apply to oil and gas exporters.

Indonesian Minister of Economic Affairs, Alonga, revealed that the export value of mining, planting, forestry, and fisheries reached as high as166 billion US dollars, accounting for 63% of Indonesia's total exports. He emphasized that the introduction of new regulations will help increase domestic participation in these industries and promote further development of related industries.

Compared with the old regulations, the new regulations have stricter requirements for foreign exchange retention. In the past, foreign exchange earnings exceededExporters of $250000 only need to deposit at least 30% of their export earnings in Indonesian banks for at least three months. Now, all foreign exchange earnings must be retained in Indonesia for at least one year.

Regarding this new regulation, Hendra, Executive Director of the Indonesian Mining Association, stated that affected mining operators are satisfied with the provisions allowing foreign exchange earnings to be used for various payments, which will help them better control the flow of funds. However, Indonesian financial bank economist Hoshina pointed out that if foreign exchange is allowed to be used for payments and operational costs, the foreign exchange remaining in the domestic financial market may not fully realize its value.

In addition, the Indonesian parliament recently passed a revision of the mining law, giving priority to issuing operating licenses to mining operators who intend to build processing facilities. This move aims to encourage more small-scale businesses to participate in mining activities and provide guarantees for ore supply. Meanwhile, commercial units under the jurisdiction of small and medium-sized enterprises and religious groups will also be given priority in obtaining operating permits for designated mining areas.