Indonesia Optimizes Natural Resource Use with New Foreign Exchange Regulations

Table of Contents

• Indonesia Optimizes Natural Resource Use with New Foreign Exchange Regulations
  • Key Changes in Government Regulation Number 8 of 2025
  • Expanded Use of DHE SDA
  • DHE SDA Usage as Deduction
  • Supervision and Enforcement
  • Government’s Outlook
  • Expert Insights and Community Engagement
  • Indonesia’s Resource Revolution: Unlocking Economic Potential Through Strategic Foreign Exchange Management

Published: march 1, 2025

Jakarta – In a strategic move to enhance national economic stability and promote enduring growth, the Indonesian government has enacted new regulations governing the management of foreign exchange earnings derived from its abundant natural resources.Government Regulation Number 8 of 2025, an amendment to Government Regulation 36 of 2023, seeks to optimize the utilization of the nation’s natural resources, aligning with Article 33 of the 1945 Constitution, which mandates that these resources be harnessed for the greatest prosperity of the Indonesian people. The regulation was formally introduced during a socialization event held on Friday, February 28, 2025.

The updated regulations arrive at a time when Indonesia’s export value reached USD264.7 billion in 2024, with a significant 62.7% attributed to natural resources exports that are subject to mandatory reporting of their Foreign Exchange Results (DHE). The government’s primary focus is on strategically managing these DHE to further stimulate and diversify the national economy.

Key Changes in Government Regulation Number 8 of 2025

The Coordinating ministry for Economic Affairs has outlined several key changes introduced by Government Regulation Number 8 of 2025. These adjustments are specifically designed to enhance the contribution of the natural resources sector to the overall national economy.

According to Ferry Irawan, deputy for Coordinating Management and Development of Business Enterprises of the State-Owned Enterprises of the Ministry of Economy, the primary changes encompass:

• Enlarged percentage of DHE placement.
• Extended placement period for DHE.
• Expanded use of DHE SDA during the retention period in Special Accounts (mutual).

Specifically, for non-oil and gas commodities, the regulation mandates 100% retention for a period of 12 months. Oil and gas commodities will continue to adhere to Government Regulation Number 36 of 2023, which requires a 30% retention for 3 months.

Expanded Use of DHE SDA

A significant aspect of the new regulation is the expanded scope for utilizing DHE SDA during the retention period. For non-oil and gas commodities, DHE SDA can be used while still placed in foreign exchange mutuals for specific purposes, including:

• Exchange to rupiah in the same bank, adhering to Bank Indonesia (BI) provisions.
• Exchange mechanisms for customers of the Indonesian Export Financing Institution (LPEI), regulated by BI.
• Payments in foreign exchange for the government.
• Payment of dividends in foreign exchange.
• Payments for goods and services, such as raw materials, auxiliary goods, and capital goods not fully available domestically or not according to specifications.
• Payments for loans for procurement of capital goods in foreign exchange.

Exporters are required to provide proof of DHE SDA usage for foreign exchange payments and a statement of its use for procuring goods, services, and loans to the bank or LPEI.

DHE SDA Usage as Deduction

The principal amount of DHE SDA can now be used by exporters and calculated as a deduction from the total DHE SDA placement obligations, providing greater versatility for businesses.

Supervision and Enforcement

the changes in DHE placement and usage necessitate a robust supervision mechanism. the government will conduct post-audit inspections of banks and LPEI to ensure compliance with the statutory provisions. Exporters currently undergoing supervision based on Government regulation Number 36 of 2023 will be considered to have fulfilled their obligations once Government Regulation Number 8 of 2025 takes effect.

Government’s Outlook

Secretary of the coordinating Ministry for Economic Affairs Susiwijono Moegiarso emphasized the importance of these regulations during the socialization event on February 28, 2025. He stated:

So we need to arrange this export foreign exchange, the aim is for us to use it properly to encourage our national economy as in terms of the number of 62.7% of our total national exports.
Susiwijono Moegiarso, Secretary of the Coordinating Ministry for Economic Affairs

Expert Insights and Community Engagement

The socialization event included discussions on various aspects of the new regulations, such as general provisions, retention and placement of DHE SDA, the use of DHE SDA, mechanisms for expanding DHE SDA to rupiah, and financial and tax instruments. The event saw participation from key figures,including Noor faisal Achmad,Head of the Macro Economic Policy Center of the Ministry of Finance; Riza Tyas Utami Hirsam,Head of bank Indonesia Statistics Department; and the Director of Regulation and development of the Banking Services for the Financial Services Authority.

Indonesia’s Resource Revolution: Unlocking Economic Potential Through Strategic Foreign Exchange Management

Did you know that Indonesia, a nation brimming with natural resources, has implemented groundbreaking new regulations to dramatically reshape its economic future? This isn’t just about managing money; it’s about strategically leveraging the country’s wealth for lasting prosperity. Let’s delve into the details with Dr. Anya Sharma, a leading expert in Southeast Asian economics and international finance.

World-Today-News.com Senior Editor (WTN): Dr. Sharma, Indonesia’s new Government Regulation Number 8 of 2025 considerably alters how foreign exchange earnings from natural resources are managed. Can you explain the core rationale behind these changes?

Dr. Anya Sharma (DAS): Absolutely. The heart of this regulation lies in optimizing the utilization of Indonesia’s vast natural resource wealth for the betterment of its citizens. For years, the challenge has been harnessing the revenue generated from exporting these resources – from palm oil and minerals to its critically important energy exports – in a way that truly fuels enduring and diversified economic growth. This new regulation aims to move beyond simply generating revenue and actively utilizes foreign exchange earnings to strategically build diverse and resilient national industries. It’s about building a more resilient and prosperous Indonesia by intelligently managing the inflows from its natural resource exports.

WTN: The regulation focuses heavily on the management of Domestically Held Exchange (DHE). Could you elaborate on the key modifications that Government Regulation Number 8 of 2025 introduces concerning DHE placement, retention periods, and usage?

DAS: Yes. The regulation introduces several significant changes to DHE management. Firstly, it increases the percentage of DHE that must be retained and extends the retention period. This ensures a larger pool of funds within the country available for strategic investment. The specific percentages and timelines vary depending on the commodity (oil and gas have different requirements than other resources). Furthermore, the permissible uses of DHE during the retention periods have significantly expanded. In short, the government’s aim is to keep a greater proportion of the foreign exchange earnings within Indonesia’s banking system, providing the central bank with tools for prudent policy. This ensures the ability for controlled releases, reducing market pressure and managing volatility.

WTN: You mentioned expanded usage of retained DHE. What are some of the key permissible uses outlined in the regulation?

DAS: This is a crucial aspect. The regulation allows for a wider range of permissible uses for DHE during the retention period. This includes:

Exchange to rupiah: Facilitating conversion to the local currency for domestic investment and transactions.

Export Financing Institution (LPEI) Mechanisms: Enabling access to financing through designated institutions for export-related purposes.

Government Payments: Allowing the use of DHE for governmental operations and initiatives.

Dividend Payments (Foreign Exchange): Enabling foreign currency dividend payouts.

Procurement of Goods and Services: Facilitating imports of essential goods and capital not readily available domestically.

Import financing (capital expenditure): This offers an extremely important element, enabling buisness investments in crucial upgraded technologies and new manufacturing equipment, ensuring upgrades in technology and capital infrastructure and building national manufacturing capabilities.

These expanded uses facilitate strategic development across diverse sectors of Indonesian Economy. Essentially,it gives businesses greater adaptability in using their own earnings for planned growth. It transforms earnings into strategic financial tools for national development.

WTN: What are the implications for Indonesian businesses, notably exporters of natural resources, under these new regulations?

DAS: For exporting businesses, the changes require more financial planning and close monitoring of their foreign currency balances. They’ll need robust accounting systems to track DHE and ensure compliance with the new usage stipulations. While there may be an initial adjustment period, the long-term benefits—increased access to finance for investment, strategic import management, and better access to export finance markets—should outweigh the administrative burden.It’s about shifting from simply exporting to becoming active participants in a strategically managed national economic development plan.

WTN: How does the government plan to ensure compliance and effective supervision of these new regulations?

DAS: The Indonesian Government is implementing a rigorous oversight framework, involving post-audit inspections of banks and LPEI.This extensive accountability measure ensures strict adherence to these new rules, preventing misuse while protecting the integrity of this new initiative.

WTN: What is the overall impact of this regulation on Indonesia’s long-term economic outlook?

DAS: The implications are far-reaching. By optimizing the allocation of foreign exchange earnings from natural resources, Indonesia is taking a crucial step towards sustainable and inclusive economic growth. this initiative contributes significantly toward self-reliance and a reduction of dependence on foreign investment alone for infrastructure development. This regulation supports a strategic and diversified economic engine which is capable of adapting to global market dynamics, increasing the strength and resilience of its economy. It’s a move toward building a more resilient, stable, and prosperous future for Indonesia.

WTN: Thank you, Dr. sharma, for sharing your expertise and insights. This innovative approach to managing natural resource revenues showcases Indonesia’s commitment to long-term economic sustainability. The changes outlined are not simply about economic management; they signal a decisive change in how Indonesia aims to sustainably leverage its resources for its people’s growth.

What are your thoughts on Indonesia’s new approach to managing its natural resources? Share your comments below or join the conversation on social media!