Indonesia is pushing ahead with a plan to force natural resource exporters to keep more foreign exchange earnings onshore in Southeast Asia’s largest economy, aiming to bolster central bank reserves by $80 billion and reverse a slide in the country’s beleaguered currency.

President Prabowo Subianto on Monday said he had signed a regulation requiring exporters across a wide swathe of Indonesia’s natural resources industry — including mining, plantation, forestry and fisheries sectors — to retain all of their overseas earnings in the country for a year.

The new rules, which mark a change from requiring companies in the sectors to keep 30% of proceeds onshore for at least three months, will take effect in March. Officials estimate the move will add $80 billion to the central bank’s foreign exchange reserves this year.

Oil and gas exporters are exempt from the regulation, Prabowo told reporters. He added that exporters will be allowed to use their foreign earnings to pay dividends, taxes, loan payments and other obligations, as well as to procure raw materials, capital goods and other materials not readily available locally.

Natural resource exports from the mining, plantation, forestry and fisheries sectors amounted to $166 billion or 63% of Indonesia’s total exports last year, according to Coordinating Minister for Economic Affairs Airlangga Hartarto.

Source: FINANCE.YAHOO