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Roundup: Indonesia takes stern move to protect national currency

Xinhua, June 10, 2015 Adjust font size:

Indonesia applies stern regulation to prevent the exchange rate of national currency rupiah from further falling against U.S. dollars by obliging cash and non-cash transactions be conducted in rupiah only throughout its territory.

Through its official instruction that took effect since June 1, the central bank obliges all businesses in the country to put rupiah it price tags of their goods and services. The obligation is applied in all business sectors, including in cargo loading and unloading activities in seaports, airline tickets and payment of foreign expatriates working in Indonesia.

Those who violate the regulation would be fined at an amount of 1 percent from the transaction value with the maximum fines was set at 1 billion rupiah (about 75,400 U.S. Dollars). One-year imprisonment period was also part of punishment for those violating the regulation.

The fines would be slapped following warning letters that would be sent twice to those committed in the violation.

To assure the success in the implementation, the central bank would conduct direct and non-direct monitoring. The direct monitoring would be conducted in sudden inspections activities in the field. Meanwhile the non-direct monitoring would be conducted by scrutinizing transaction reports filed in by business sectors and evaluating data supplied by various sources.

"In the sudden inspection, the central bank officials would ask the firms to provide their financial statement, data on transactions and other supporting data. Besides that the officials must be allowed to access the firm's operational activities," a statement released by the central bank said on Tuesday.

To address implementation of the new regulation in aviation business sector, Indonesia's Transportation ministry has summoned representatives of airlines operating across the country and other businesses related to commercial aviation industry.

"The results of the meeting with those representatives was that they agreed to abide by the regulation," Air Transport Director General at the ministry Suprasetyo said here on Wednesday.

Besides that, the ministry has also made coordination with International Air Transport Association (IATA), he added.

He said that coordination with IATA was necessary as IATA administers foreign airlines operating across the globe.

He expected that IATA would socialize the new regulation applied by Indonesian government to oblige the use of rupiah in each transaction in the country to the operators of foreign airlines serving in Indonesia.

The Indonesian currency of rupiah has been severely falling down against U.S. dollar since March this year as it fell to more than 13,000 per 1 U.S. dollar. That figure was the worst since 1998.

Indonesian government is barely able to fix this condition as the sharp drop of national currency value against U.S. dollar was due to external factor, which is also experienced by currencies of other countries. Endi