4 May 2015
On 31 March 2015, Bank Indonesia (BI) issued Regulation No. 17/3/PBI/2015 on the Mandatory Use of Rupiah within the Indonesian Territory (the Regulation). The Regulation has been issued as part of BI's efforts to (i) clarify and implement Law No.7 of 2011 on Currency, which required the use of Rupiah as the currency for domestic financial transactions in Indonesia, (ii) control onshore demand for dollars, and (iii) ease pressure on a depreciating Rupiah.
While the Regulation makes it clear that Rupiah must be used in cash and non-cash transactions in Indonesia other than the specifically exempted transactions, a number of questions remain.