BANKING AND EXCHANGE CONTROLS

Banking

There is no restriction imposed on the use of banking service by investing companies.

The investing companies are given free-choice to use any banking services, either state-owned, international, joint venture, or national private banks.

 

Traffic of Funds

Indonesia adopts a free foreign currency exchange system, which is not common particularly among developing countries.

Repatriation of capital, profits, costs related to expatriate employment and expenses, as well as principal loan and interest, royalty, technical fees, etc. is free.

 

Foreign Exchange In Business Transaction

The formal currency to be used in domestic transaction among the Indonesian citizens is Rupiah (Rp). However, for the international transactions, including business transaction by concerned partied, there is no restriction imposed on the use of currencies. Commonly used currency is US$ (US Dollar).

Indonesia applies a so-called floating foreign exchange, meaning that the exchange rate of Rp to any foreign currencies rests with the prevailing dynamic market condition. The current exchange rate of Rp to foreign currency seems to be favorable for the export oriented industries.

An annual time series data on exchange rates of US$ against Rp is provided, whereas exchange rates of various currencies against Rp are published daily by all daily national newspaper and also reported by some national TV stations.