Daily Management Review

Indonesia to Ban Dollar


07/01/2015


In Indonesia, with the July 1, 2015 a ban on the use of the US dollar or any other foreign currencies in financial transactions on its territory officially came into effect.



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In the spring of 2015, the Bank of Indonesia (Bank Indonesia) announced the upcoming prohibition of the exercise of any payment in any currency other than the national, including the issue of wages, payment of air tickets, hotel accommodation, rental properties. This, in particular, in April this year was reported by Reuters.

In his comments on the prohibition of monetary circulation director of Bank Indonesia Eko Yulianto, in particular, said:

- Until now, currencies of foreign countries were used in Indonesia during many transactions and calculations, and this puts additional pressure on the exchange rate of our currency. We do not want dollarization of Indonesia economy, so we have to maintain the sovereignty of rupees.


Later, the Central Bank of the country have made minor adjustments to the ban, saying that international companies will be an exception: they can continue to pay their foreign employees in dollars. Furthermore, the ban also does not affect companies that invest in the construction of energy facilities and infrastructure in Indonesia.

The Central Bank of Indonesia also announced new rules that violators can be fined up to $ 1 billion Indonesian rupiah or suspended from the use of payment systems in the country.

Earlier, Indonesia announced that they want to re-join the Organization of Petroleum Exporting Countries.

Minister of Energy and Natural Resources of Indonesia, Sudirman Said at the summit of OPEC (Organization of the Petroleum Exporting Countries, OPEC) in Vienna, announced plans to return to Indonesia in the cartel. On this, he specifically stated in an interview with The Fuse.

The government of Indonesia announced its withdrawal from OPEC during the conference in September 2008. At the same time, OPEC announced that they hope that Indonesia will return in the future:

- The conference regretfully accepted the wish of Indonesia to suspend its full membership in the organization and expressed the hope that the country will return in the organization in the not too distant future.


On the sidelines of this OPEC conference, Sudirman Said said that Indonesia expects to renew their membership for 6 months. He noted in particular:

- This solution is all ready. We are not withdrawing its membership in the organization, we just stopped it. The issue is to reach agreement on the resumption of our status in OPEC.


Indonesia is the largest oil producer in Southeast Asia, ahead of Malaysia, Thailand and Vietnam. At the same time indicators of oil production in the country in recent years has been steadily declining. Since 2004, Indonesia has become a net importer (net importer) oil: oil imports exceed the volume of its own production.

It is worth noting that OPEC already had precedents when members of the organization went away and returned. In 1992, Ecuador suspended its participation in the cartel, but in 2007 returned to OPEC.

source: reuters.com






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