Joko Calls on Indonesian Lenders to Do Their Bit in Boosting the Rupiah
Jakarta. President Joko Widodo used his opening speech at the Indonesia Banking Expo 2015 in Jakarta on Wednesday to urge the nation's banking sector to help ease pressure on the rupiah.
“I ask bank directors to encourage customers to use the rupiah for transactions in Indonesia. This is important to stabilize our currency. I also urge [lenders] to cash funds from export transaction in Indonesia,” Joko said.
“This is important because the demand for the dollar is very high.”
Joko then asked banks to increase third party funds in US dollar to help boost the rupiah's value.
“Indonesia's Financial Services Authority chairman Muliaman Hadad said he is working to ease the requirement for foreigners to open a new bank account in foreign exchange. Foreigners can now open a $50,000 bank account by only bringing their passport,” he said.
Foreigners are currently required to present a reference letter from their employer, their passport, a copy of their staying permit (Kitas), and an Indonesian tax registration number (NPW) in order to open a bank account.
Fauzi Ichsan, acting executive director at the Indonesia's Deposit Insurance Corporation, or LPS, welcomed the move, saying it can boost US dollar liquidity in the country, but added that it was "only the first step."
"The second step is to convert these dollars into rupiah," he said.
"From around Rp 4,300 trillion [$302.2 billion] third-party funds in Indonesia, almost 18 percent of it is saved in foreign exchange ̶ around $60 billion... How can we convert that amount into rupiah so it could be used to pay for imports and pay debts? That's the question," Fauzi added.
IBEX, a banking expo initiated by the Indonesian Banking Association (Perbanas), runs through Friday.
Perbanas chairman Sigit Pramono said IBEX 2015 would focus on digital banking and the pursuet to provide banking services for unbanked Indonesians, or around 54 percent of the 250 million population.
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