Indonesia to Reevaluate Export FX Policy Amid Limited Impact on Foreign Reserves

Indonesia Considers Policy Overhaul for Export Earnings

Indonesia's government is set to reevaluate its foreign exchange export earnings policy, known as DHE SDA, after officials observed its limited impact on strengthening the nation's foreign reserves. The announcement was made by Finance Minister Purbaya Yudhi Sadewa, who confirmed that the policy's results have not significantly affected the country's foreign reserves.

The current policy, formalized under Government Regulation No. 8/2025, mandates that exporters in key natural resource sectors—including mining (excluding oil and gas), plantations, forestry, and fisheries—retain 100 percent of their export proceeds within Indonesia's financial system for a minimum of 12 months. These funds are required to be held in special accounts at domestic banks. The regulation, which came into effect on March 1, 2025, replaced a previous rule (GR 36/2023) that only required 30 percent retention for three months. Exemptions apply to transactions below $250,000 per shipment.

Underwhelming Results and Declining Reserves

Despite its ambitious goals to increase foreign exchange reserves by an estimated $80-100 billion annually and stabilize the rupiah, the policy's performance has been deemed underwhelming. Finance Minister Sadewa stated, 'The DHE rule will be reviewed. I'm not sure if it will be revised, but the results so far have not significantly affected our foreign reserves.'

Indonesia's foreign reserves have recently experienced a decline, falling to $148.7 billion in September 2025, down from $150.7 billion in August. This marks the lowest level since July 2024. The central bank attributed this decrease primarily to government external debt payments and interventions to stabilize the rupiah amidst global market volatility. While the current reserve position is still considered sufficient, covering 6.2 months of imports or 6 months of imports and government external debt payments—well above the international adequacy standard of three months—the government is keen to bolster these figures.

Addressing Loopholes and Future Adjustments

Chief Economic Affairs Minister Airlangga Hartarto indicated that the reevaluation would focus on the implementation of the DHE SDA regulation, noting that challenges stem from 'disruptions in fund transfers' rather than exporters themselves. State Secretary Prasetyo Hadi further highlighted the existence of 'loopholes allowing some exporters to keep earnings offshore,' which President Prabowo Subianto has requested be thoroughly reviewed. Bank Indonesia may also play a leading role in reassessing the policy.

The reevaluation signals the government's commitment to refining its economic strategies to ensure that export earnings contribute more effectively to national economic stability and foreign exchange liquidity. Finance Minister Sadewa, who assumed his role on September 8, 2025, has also announced plans for market-based incentives to encourage the repatriation of offshore US dollar savings, further aiming to strengthen the country's financial position.