Indonesia bans foreign currencies in domestic transactions

[webfact]

Indonesia bans foreign currencies in domestic transactions
DOW JONES

(INDONESIA) Australians holidaying in Indonesia could find themselves short of money from today after the country’s central bank pushed through new legislation prohibiting foreign currencies from being used in domestic transactions.

The new rule, which takes effect today, has been introduced as Jakarta tries to get a grip on the falling rupiah, a historically volatile currency that has been on a downward slide over the last four years..

Trust in the rupiah has been fragile ever since the Asian financial crisis in the late 1990s, when its value went into free fall and Indonesia went under an International Monetary Fund rehabilitation program.

The rupiah has become one of Asia’s worst-performing currencies this year, depreciating around 7% against the dollar. Bank Indonesia says the prohibition against foreign currency in domestic transactions is intended to reduce reliance on the dollar and other foreign currencies and mitigate against capital outflows.

Full story: http://www.theaustralian.com.au/news/world/indonesia-bans-foreign-currencies-in-domestic-transactions/story-e6frg6so-1227423013223

-- The Australian 2015-07-02

[webfact]

Indonesian ban on foreign currency payments comes into force
Reuters / Yusuf Ahmad

JAKARTA: -- The Central Bank of Indonesia has put into force a complete ban on the use of the US dollar and other foreign currencies in all financial transactions in the country to stop the rupiah free fall.

The ban, effective from July 1, 2015, was first announced by the head of Bank Indonesia Eco Yulianto in April.

He said then that the ban is on any transactions, including payments for hotel accommodation, flights, rental property and the payment of wages, as well as fixed prices in any other currency except the Indonesian rupiah. Breaking the law can be punished with imprisonment of up to a year or a fine of $15,000.

However, the central bank later said it made an exception for international companies who will still be allowed to pay their foreign employees in dollars.

Full story: http://rt.com/business/271018-indonesia-bans-foreign-currencies/

-- RT 2015-07-02

[Chang_paarp]

This will not have the desired effect, betting the rate for "black" transactions will be better than the official one.

[topt]

The ban is on "any transactions" - but the possible fine is in US Dollars ($15,000)..........

[lensta]

Indonesian ban on foreign currency payments comes into force

Reuters / Yusuf Ahmad

JAKARTA: -- The Central Bank of Indonesia has put into force a complete ban on the use of the US dollar and other foreign currencies in all financial transactions in the country to stop the rupiah free fall.

The ban, effective from July 1, 2015, was first announced by the head of Bank Indonesia Eco Yulianto in April.

He said then that the ban is on any transactions, including payments for hotel accommodation, flights, rental property and the payment of wages, as well as fixed prices in any other currency except the Indonesian rupiah. Breaking the law can be punished with imprisonment of up to a year or a fine of $15,000.

However, the central bank later said it made an exception for international companies who will still be allowed to pay their foreign employees in dollars.

Full story: http://rt.com/business/271018-indonesia-bans-foreign-currencies/

-- RT 2015-07-02

Interesting that the fine is in USD

[ronrat]

my brother works there. they get paid in US dollars. They bet amongst them selves in US dollars.

[shaggy851]

So just rupiah ok. We all need briefcases to go buy a bottle of water.

[steveyinasia]

Will that mean that you have to pay the visa on arrival in Rupiah as well? Has anyone checked?

[Barin]

This is an important step to strengthen the local currency.

Indonesia is on the right track. Bravo!

[RaoulDuke]

Will that mean that you have to pay the visa on arrival in Rupiah as well? Has anyone checked?

It is a good thing that they just waived the requirement for a VOA for 30 more countries:

http://www.thaivisa.com/forum/topic/811301-30-extra-countries-in-indonesia-visa-free-immigration-policy/

[ggt]

The rupiah has become one of Asia’s worst-performing currencies this year, depreciating around 7%

Many economists and seasoned investors are predicting that most of the world's currencies value will drop dramatically over the next few years as economies decline and governments continue printing large amounts of money...out of control spending...running up national debt with no ability to pay...

The Greece thing is just the tip of the iceberg...even though the US dollar is doing well against other fiat currencies...it is a mirage...bolstered by US (tweaked) economic data...designed to cover-up the true state of the union...

The world has never seen a time like we are in now...the Central Banks have used all their bullets to manipulate world economies...when the next crash comes...it will be massive...

There is a site called "Shadow Stats" that continues to track US economic data based on solid unadulterated math...an entirely different picture emerges from raw undiluted economic data...

Edited July 2, 2015 by ggt

[TallGuyJohninBKK]

Sorry, but I'm not following this...

Are they saying tourists there wouldn't be able to exchange their home country currency in Indonesia for local rupiah, because that would be a transaction with a foreign currency?

Or, are they saying, you just can't pay or things or buy things directly with any currency other than the rupiah?

If it's the first thing, that seems crazy.

If it's the second thing, that seems not so bad... I mean, how many places in Thailand can you buy things or pay for things using anything other than the baht?

From reading the full OP article, it would seem to be the latter, just only the second thing... But even the article stupidly doesn't directly address the subject of tourists being able to exchange their home currency in country.

According to Bank Indonesia, transactions within the country in currencies other than rupiah amount to $73 billion a year.

From today, prices for all goods and services will need to be quoted in rupiah only, a measure that will affect prices for hotels, and restaurants used by tourists as well as local services, such as legal advice, insurance and accounting.

Edited July 2, 2015 by TallGuyJohninBKK