Banking in Foreign Currencies for Expats in Indonesia Made Easier
Soon it will be easier for foreigners (expats) to have a foreign currency bank account (non-rupiah) in Indonesia. Muliaman D. Hadad, Chairman of the Financial Services Authority (OJK), stated it is bound to issue a new regulation that allows for easier banking in foreign currencies in Indonesia. This regulation is made in an effort to raise the country’s foreign exchange reserves and support the ailing rupiah.
Currently the OJK, the Indonesian government agency that regulates and supervises the country’s financial services sector, is busy completing the draft for the new regulation. Chairman Hadad, who expects the draft to be completed within two weeks, added that other countries have successfully implemented such a regulation.
The OJK in particular targets foreigners that frequently visit Indonesia for business or family purposes. About 20 percent of this year’s estimated 10 million foreign visitor arrivals are frequent visitors. According to calculations of the OJK, Indonesia could obtain an additional USD $24 billion in US dollar reserves if these frequent foreign visitors are allowed to easily deposit their foreign currencies in Indonesian bank accounts.
Hadad explained that with the new regulation an expat could open a foreign currency account by showing a passport as well as a living permit in case the expat intends to deposit between USD $2,000 and USD $50,000 in the account. In case the foreigner wants to deposit more than USD $50,000 then he/she will need to show a reference document from a bank in their country of origin, the spouse's identity documents, and a copy of the residential contract in Indonesia.
Earlier this week, Bank Indonesia announced that the country’s foreign exchange reserves had declined to USD $105.3 billion in late August as the central bank had used part of the reserves to support the rupiah which has been showing severe weakness against the US dollar. So far this year, the rupiah has depreciated nearly 15 percent against the greenback.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
Meanwhile, Indonesia’s Chief Economics Minister Darmin Nasution said the government is to announce a policy package to the public on Wednesday (09/09). Through this package the government aims to restore confidence in the rupiah (which has fallen to a 17-year low) and boost the country’s economic growth (which is hovering at six-year lows). Reportedly, the package involves deregulation, industrial development, investment, and the development of a Special Economic Zone.
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I have checked many banks. No bank follows S-246?S01/2015 or intends to follow the regulation as of Sept. 30th. EVEN though the banjs are aware of the regulation they are not going to follow it.