Indonesia Expands FX Retention Exemptions to China, Australia, and Canada

The Indonesian government is refining its foreign exchange policy for the export of natural resources, known as DHE SDA. The policy, which officially took effect on June 1, 2026, via Government Regulation (PP) Number 21 of 2026, generally requires exporters of natural resources to keep their foreign currency export proceeds in Indonesian banks for a specified period. Under the standard regulation, exporters are obligated to place 100 percent of their foreign exchange earnings in Himbara (Himpunan Bank Milik Negara).

Exemptions for Four Key Trading Partners

Coordinating Minister for Economic Affairs Airlangga Hartarto announced on July 23, 2026, that the government is granting exemptions to China, Australia, and Canada, joining the United States as the nations permitted under the relaxed framework. Airlangga explained that the decision to provide exemptions was based on the existence of extensive bilateral agreements. Ya kan beberapa negara yang kita cukup banyak yang dengan bilateral, salah satunya misalnya dengan China, dengan Amerika, kemudian Australia dan beberapa lagi negara lain, satu lagi Kanada, Airlangga stated at the Office of the Coordinating Ministry for Economic Affairs in Jakarta.

Finance Minister Purbaya Yudhi Sadewa, who attended a coordination meeting regarding the policy alongside Investment Minister Rosan Perkasa Roeslani and representatives from Bank Indonesia, noted that the government specifically considered bilateral or multilateral agreements, large investment values, and the operational presence of banks from those countries within Indonesia when determining the exemptions. Purbaya confirmed that the United States had previously been identified as eligible for the exemption, with China being the latest addition to the list.

Technical Mechanisms and Implementation

The government is currently finalizing the technical mechanisms for implementing these exemptions. According to Finance Minister Purbaya Yudhi Sadewa, the meeting held on July 23 focused on discussing the list of countries, the technical mechanism for policy implementation, and the designation of which banks would be authorized to receive the export earnings. While the general rule requires the placement of DHE SDA in Himbara banks, the new exemptions allow for flexibility regarding the placement of these funds outside of the state-owned banking system.

The government has emphasized that the policy remains a priority for maintaining the stability of the rupiah. By allowing specific exemptions based on trade partnerships, officials intend to balance the need for domestic liquidity with the practicalities of international trade relations. Coordinating Minister Airlangga Hartarto indicated that the full list of details regarding the implementation and the specific banks designated to handle these proceeds would be managed through ongoing technical arrangements.

Evaluation and Policy Oversight

The government continues to monitor the impact of the DHE SDA policy. The implementation of the regulation follows the government’s broader efforts to improve the national financial system. Officials have indicated that the coordination between the Ministry of Finance, the Office of the Coordinating Minister for Economic Affairs, and other relevant agencies remains central to the policy’s execution. As of the July 23 announcement, the government is preparing the final framework to ensure that the relaxation of rules for these four countries aligns with the original intent of the 2026 regulation.

The government has not yet disclosed further details regarding the specific terms for other potential trading partners, but has confirmed that the current focus is on the four identified nations. The policy, which mandates the repatriation of earnings to support the national currency, remains a key component of Indonesia’s economic strategy as it continues to adjust the regulatory environment for natural resource exporters.

Sources: Jakartaglobe.