Indonesia's central bank will require exporters to bring home overseas funds, in a move aimed at boosting governance and reducing exposure to short-term capital flows, according to a spokesman.
Bank Indonesia spokesman Difi Johansyah said the new regulation, expected to be launched this month, would require companies to repatriate foreign currency earned on exports.The move, he said, has the potential to bring $31.5 billion of forex earnings to the country."The purpose is to strengthen our domestic forex market's base," Johansyah told AFP. "We can improve governance as we'll be able to match fund data with the flow of goods."Exporters currently face no restrictions on funds parked overseas.Several emerging nations, including Indonesia, are concerned at a growing amount of foreign capital flowing into their economies as investors seek better returns on their investments from higher interest rates compared with the West.Indonesia, Southeast Asia's largest economy, grew close to 6.5 percent from a year earlier in both the first and second quarters this year after expanding 6.1 percent in 2010.