Indonesian exporters urged to repatriate foreign profit to shore up rupiah

Source: Xinhua| 2018-08-13 19:13:25|Editor: xuxin
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JAKARTA, Aug. 13 (Xinhua) -- The Indonesian government on Monday called on exporters to send back the profit of their exports and convert it into rupiah in a bid to help prop up the descending rupiah.

The call came as rupiah tumbled to 14,600 against the greenback on Monday, the lowest in three years, as a knock-on impact of the financial crisis in Turkey.

Indonesian Finance Minister Sri Mulyani Indrawati noted that the repatriation is looked to drift up supply of U.S. dollars in the country which is expected to pare the downshift of rupiah.

"We have talked to exporters, asking them to send home their U.S. dollars. The funds will not only be kept in domestic banks but must also stay long in the country ," she said.

To pave the return of the greenback into the country, Mulyani asserted that the government would incentivize the exporters.

"The importance of bringing foreign profit home to drive up dollar supply is a moral solution that we enact," she said.

Rupiah has been weakening in recent months as the U.S. Fed has twice hiked its benchmark interest rate this year and is looked to add a further two hikes before the year end.

The tumble of Turkey's lira has amplified the effect and dragged rupiah down further, shooting the currency to 14,600 on Monday against the greenback from 14,437 on Saturday, according to the data from the central bank.

Indonesian current account deficit extended to 8 billion U.S. dollars or 3 percent of the GDP in the second quarter from 5.7 billion U.S. dollars or 2.2 percent of the GDP in presiding quarter, according to the data from the central bank, which took a pause in tightening policy last month after taking an aggressive rate hike by a 100 basis points to 5.25 percent from May.

According to the national statistics bureau, the cumulative of Indonesia's export by June ratcheted up to 88.02 billion U.S. dollars or a 10.03 percent growth year-over-year, after registering 168.73 billion U.S. dollars for the whole of last year. Notwithstanding, the result of exports have been parks offshore.

The Southeast Asia's biggest economy is the world's largest exporter and producer of crude palm oil and thermal coal, and the world's biggest exporter of rubber and cocoa, as well as home to the world's second largest copper mine.