Such a statement was made in response to complaints from businesspersons regarding the risks of the policy.
"I understand the concerns, but we want a stronger domestic economic turnover, as we will have more liquidity derived from our mining exports," Nazara remarked here on Wednesday.
The deputy minister clarified that the policy, effective March 1, was drafted considering the country's abundant domestic mining production, encompassing not only coal but also other minerals.
Nazara noted that foreign exchange earned from the sale of mining products is expected to genuinely circulate within the country.
He further highlighted Indonesia's long-standing history of selling its natural resources, which include forestry products, petroleum, as well as mining and mineral products.
"These products generate foreign exchange. Maybe 50 years ago, people did not look at it, but today, various types of mines are being explored as they have higher economic value," Suahasil noted.
Hence, the government aims to optimize natural resources extracted from Indonesia to maximize benefits for the country.
Suahasil remarked that foreign exchange can serve as collateral or a foundation for additional economic activities.
The benefits of foreign exchange can also support subsequent exploration and mining activities. Essentially, this ensures that money continues to circulate within the country, he elaborated.
"This is the aim of this policy. If there is foreign exchange from exports, and we ask for it to be in Indonesia, that means it is circulating in Indonesia," he remarked.
He stated that ideally, the government would prefer that export earnings be converted into rupiah, as this would greatly benefit the economy.
Nevertheless, depositing foreign exchange earnings into domestic banks is viewed as a positive move, even if they are not converted into rupiah.
The newly established Government Regulation No.8 of 2025 mandates that exporters deposit 100 percent of the forex earned from natural resource exports into domestic banks within 12 months.
Coordinating Minister for Economic Affairs Airlangga Hartarto projects that the regulation can increase foreign exchange reserves by US$80 billion.
Exporters would still be permitted to pay dividends and non-tax levies, as well as purchase raw materials, supporting materials, and capital goods using foreign currencies.
The domestically deposited foreign exchange can also be utilized to repay loans taken out for purchasing capital goods.
President Prabowo Subianto has vowed to enforce export suspensions on companies that fail to comply with this state directive.
Related news: Expect export earnings policy to boost forex reserves: Prabowo
Related news: Indonesia's new forex regulation can help strengthen rupiah: IBC
Related news: Minister hopeful of forex revenue from tourism to reach target
Translator: Imamatul Silfia, Yashinta Difa
Editor: Azis Kurmala
Copyright © ANTARA 2025
