Indonesia eases forex deposit rules for qualifying mining exporters

Starting September 1, 2026, Indonesian mining exporters will no longer be required to fully convert all foreign currency earnings into rupiah immediately upon receiving payments for exported minerals. The change comes under a revised regulation aimed at improving the flow of capital and supporting downstream industries. The new rule allows qualifying companies to hold up to 30 percent of their mineral export proceeds in foreign exchange for a period of three months instead of converting the entire amount into local currency within 12 months. This shift marks a departure from previous strict requirements that mandated immediate conversion of all export earnings into rupiah. The updated regulation, outlined in Article 18A of Government Regulation No. 21/2026, was introduced following an analysis of export data from March 2025 to July 2026. Officials reviewed customs declarations submitted by the Directorate General of Customs and Excise to identify eligible mining exporters. Out of 537 tax identification numbers initially flagged, 64 were found to meet the necessary criteria based on cross-referencing with the Directorate General of General Legal Administration. These companies must be structured as limited liability entities with at least one shareholder from one of five designated partner nations, namely the United States, China, Hong Kong, Australia, and Canada. These countries collectively represent the largest foreign investments in Indonesia's mining industry and maintain existing trade agreements with the nation. The new policy includes several key objectives. According to Susiwijono Moegiarso, secretary of the Coordinating Ministry for Economic Affairs, the changes aim to enhance macroeconomic stability and bolster domestic financial markets. They also seek to provide more flexibility for investment and working capital needed for downstream processing activities. Additionally, the measure is intended to stimulate further investment and increase overall export performance. Under this framework, eligible exporters can choose to store their foreign currency earnings in specialized accounts at 15 designated foreign-exchange banks. These institutions include both five state-owned banks and ten private-sector banks selected specifically for this purpose. Companies that qualify for the new provisions are given the option to either participate in the program or continue adhering to the standard regulations set forth in Government Regulation No. 2/2026. Those who wish to opt out must formally declare their choice to Bank Indonesia within five business days after the official announcement of the list of approved exporters. Failure to make such a declaration will result in automatic enrollment in the special facility. Meanwhile, non-oil-and-gas mining exporters who do not qualify for the new arrangement will still be required to convert 100 percent of their export proceeds into rupiah over a 12-month period. Oil-and-gas exporters, even outside the new scheme, will need to place at least 30 percent of their earnings in local currency for three months. The move reflects broader efforts by the Indonesian government to streamline its approach to managing natural resources and enhancing economic resilience. It follows earlier initiatives aimed at restructuring resource policies to improve energy security and control. The implementation of these new rules is part of a larger strategy led by President Prabowo Subianto, who has directed attention toward increasing efficiency and governance standards within the mining sector. As the policy takes effect, officials expect it to contribute positively to the national economy by encouraging greater participation from international investors and fostering conditions conducive to long-term industrial growth.