Indonesia’s New FX Lock-Up Rule to Hit Commodity Exporters

Indonesia’s commodity exporters could see their cash flow strained as the government tightens control over their foreign-exchange earnings in a bid to keep more dollars onshore and support the weakening currency.

The Indonesian Palm Oil Association has requested the finance ministry for a review of the planned regulatory changes, which include capping the amount of FX earnings they can convert to rupiah to just 50%. The policy could raise interest loan costs for companies as they’ll need to borrow more from banks, the group’s chairman Eddy Martono said on Tuesday.