UPDATE 1-Indonesia announces looser export earnings rules for US, China exporters

Adds details of announcement

- Companies exporting Indonesia's natural resources to the United States, China, Canada and Australia will be treated more leniently in a new earnings retention regime aimed at defending the faltering rupiah currency, chief economic minister Airlangga Hartarto told reporters on Thursday.

Below are the details:

  • Indonesia had originally mandated that exporters of all the country's natural resources, with the exception of oil and gas, must keep the entirety of their earnings in Indonesian state-owned banks for at least 12 months.

  • Exporters that are either based in the four countries or ship Indonesian natural resources there, will be allowed to keep a smaller percentage of their earnings inside Indonesia and for a shorter period of time, Airlangga told reporters.

  • Exporters associated with these countries will need to keep at least 30% of the proceeds for a minimum of three months in the onshore financial system, another ministry official, Edi Prio Pambudi, told reporters.

  • The earnings retention regime previously included special clauses for miners under bilateral rules or deals with foreign governments, but Jakarta had not announced which countries were eligible.

  • The rules were designed to increase the supply of foreign exchange in domestic markets and support the falling rupiah.

  • Under the rules, a maximum of 50% of proceeds from commodity exports can be used for business operations if they are converted into rupiah.