Jakarta. Indonesia announced Friday that it would ease its foreign exchange retention rule for major trading partners Japan, South Korea, and the European Union (EU).
Jakarta has mandated natural resource exporters to keep all of their foreign currency earnings onshore for at least a year, with the banking options limited to state-owned banks.
Mining exporters that meet certain criteria — namely having shareholders from eligible countries — enjoy less stringent rules. Not only do they have more banking options, Indonesia lets the miners park just at least 30% of their proceeds for 3 months minimum.
This special treatment initially applied to the US, China (including Hong Kong), Australia, and Canada.
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“And now we have decided to expand the [exemption mechanism] to South Korea, Japan, and the EU,” Airlangga said in Jakarta.
Oza Olavia, who helms the National Single Window body under the Finance Ministry, told the same conference that Jakarta had “taken into account existing trade agreements with these countries and the volume of their investments”.
Jakarta’s trade treaty with Japan has been in effect since 2008. They recently upgraded its terms to include zero tariffs for Indonesian tuna exports. Indonesia’s Japan-bound exports totaled $12.8 billion in the first 9 months of 2026. Japan is also a major source of foreign direct investment (FDI), totaling $2.6 billion over the same period.
Indonesia and South Korea, too, are also bound to a tariff-slashing trade agreement from early 2023. Jakarta’s exports rose by around 7.5% year-on-year to $10.1 billion between January and September, according to government data. South Korea contributed at least $1.7 billion to Indonesia’s FDI this year.
An Indonesia-EU trade pact — the fruit of a decade-long negotiations — is slated for entry into force in 2027. Airlangga recently revealed that the governments would sign the agreement on Nov. 21.
The miners who qualify for the relaxation must have at least one shareholder from the aforementioned economies with a minimum 10% ownership stake.
Asked whether Indonesia planned to also grant ASEAN neighbors special treatment, Airlangga replied that such decisions would be subject to further evaluations taking place every three months.
Jakarta introduced this lock-up rule to grow its foreign exchange reserves, which rose to $146.8 billion as of end-October. The reserves stood at $146.3 billion the previous month.
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