Corporate access to forex expanded
JAKARTA: Bank Indonesia again gives more room for the corporate sector to access forex at banks after previously revoking the regulation that once limited those top debtors early this year.
The provision was contained in Bank Indonesia Regulation (PBI) No: 13/4/PBI/2011 on the Repeal of PBI No.10/22/PBI/2008 on the Fulfillment of Domestic Corporate Needs for Forex at Banks.
In the previous regulation, PBI No.10/22/PBI/2008, the access to forex at banks by those debtors were somehow limited. Banks even can1 propose for the forex needs against rupiah to BI for those domestic corporate.
Head Public Relations Bureau of Bank Indonesia, Difi A. Johansyah addressed such revocation aimed to show that Indonesia™s economy is already normal, enabling those corporate to directly access forex . “Thus, the companies can now access forex at domestic market instead of going to BI,”� he said to Bisnis yesterday.
He further added that such provision is also issued to anticipate the economic condition amidst the crisis specifically and to avoid speculative forex loans which may trigger currency fluctuation.
“Prior to his, PBI [Fulfillment of Domestic Corporate Needs for Forex at Banks) aims as an anticipative measure so that companies not rush for forex which may destabilize the currency,” he said.
Difi added that at the moment, central bank believes that the current economic condition is relatively normal, thus such provision needs to be revoked as the forex availability domestically is rather sufficient along with the excessive foreign inflow.
During the 2008 crisis, rupiah touched IDR12,000 per US dollar following the rising forex needs either for corporate interest, capital accumulation or only for speculation.
Preventing speculation
Thus, BI issued such regulation to anticipate the currency speculation that may worsen rupiah even more. In such regulation, bank may propose forex needs against rupiah to BI as it only applies for governmental institutions.
Besides, bank is prohibited to propose forex needs for any domestic corporate related to the bank. Any proposal relating to forex must2 have underlying economic activities in Indonesia.
Underlying economic activities include forex debt settlement, import payment, and any other needs supported by legal documents or as long as the company exploits it neither for any transactions nor investment in the money market.
Director of Bank Mutiara, Benny Purnomo supported such revocation since it may3 increase the corporate access to forex loan. The bank once named Century recorded an intensified forex transaction in its core business.
“By such revocation, the domestic company has more choices in fulfilling its funding needs. They can use both dollar and rupiah,” he said. (T02/NOM)
The provision was contained in Bank Indonesia Regulation (PBI) No: 13/4/PBI/2011 on the Repeal of PBI No.10/22/PBI/2008 on the Fulfillment of Domestic Corporate Needs for Forex at Banks.
In the previous regulation, PBI No.10/22/PBI/2008, the access to forex at banks by those debtors were somehow limited. Banks even can1 propose for the forex needs against rupiah to BI for those domestic corporate.
Head Public Relations Bureau of Bank Indonesia, Difi A. Johansyah addressed such revocation aimed to show that Indonesia™s economy is already normal, enabling those corporate to directly access forex . “Thus, the companies can now access forex at domestic market instead of going to BI,”� he said to Bisnis yesterday.
He further added that such provision is also issued to anticipate the economic condition amidst the crisis specifically and to avoid speculative forex loans which may trigger currency fluctuation.
“Prior to his, PBI [Fulfillment of Domestic Corporate Needs for Forex at Banks) aims as an anticipative measure so that companies not rush for forex which may destabilize the currency,” he said.
Difi added that at the moment, central bank believes that the current economic condition is relatively normal, thus such provision needs to be revoked as the forex availability domestically is rather sufficient along with the excessive foreign inflow.
During the 2008 crisis, rupiah touched IDR12,000 per US dollar following the rising forex needs either for corporate interest, capital accumulation or only for speculation.
Preventing speculation
Thus, BI issued such regulation to anticipate the currency speculation that may worsen rupiah even more. In such regulation, bank may propose forex needs against rupiah to BI as it only applies for governmental institutions.
Besides, bank is prohibited to propose forex needs for any domestic corporate related to the bank. Any proposal relating to forex must2 have underlying economic activities in Indonesia.
Underlying economic activities include forex debt settlement, import payment, and any other needs supported by legal documents or as long as the company exploits it neither for any transactions nor investment in the money market.
Director of Bank Mutiara, Benny Purnomo supported such revocation since it may3 increase the corporate access to forex loan. The bank once named Century recorded an intensified forex transaction in its core business.
“By such revocation, the domestic company has more choices in fulfilling its funding needs. They can use both dollar and rupiah,” he said. (T02/NOM)
Keterangan :
1. Banks even can1 propose for the forex needs against rupiah to BI for those domestic corporate.
- Can propose , fungsinya = Ability / possibility
- Can propose , fungsinya = Ability / possibility
2. 2. Any proposal relating to forex must2 have underlying economic activities in Indonesia.
- Must have underlying, fungsinya = 95% certainty
3. 3. Director of Bank Mutiara, Benny Purnomo supported such revocation since it may3 increase the corporate access to forex loan.
- May increase the corporate, fungsinya = less than 50% certainty
Indonesia Parliament Approves Power to Increase Fuel Prices Amid Protests
JAKARTA: Indonesia’s parliament amended a law to allow the government to raise fuel prices should4 crude exceed a budget assumption, paving the way for an increase even as the biggest public protests since 2008 threaten President Susilo Bambang Yudhoyono’s efforts to contain the budget gap.
Lawmakers voted 356 to 82 in favor of a proposal by Yudhoyono’s Democrat Party to allow an increase if the Indonesia Crude Price exceeds the budget assumption by 15 percent over a six-month period, Speaker of the House Marzuki Alie said at the conclusion of the 14 ½-hour session. Two opposition parties walked out on the proceedings.
About 2,000 protesters tore down a gate in front of the parliament house grounds in Jakarta yesterday, and police disbursed them with tear gas and water cannon after someone ignited fireworks and demonstrators threw rocks. Police had estimated more than 81,000 would protest across the nation.
Soaring food and fuel costs in the world’s fourth-most populous nation contributed to riots that led to the ousting in 1998 of the dictator Suharto, then Asia’s longest-reigning ruler.
This week’s protests underline the balancing act Yudhoyono must undertake as he seeks to curb a subsidy bill that threatens to sap funds from pivotal health, education and transport programs necessary for boosting investment and growth.
Yudhoyono’s administration had proposed to increase the price of subsidized gasoline by 33 percent to 6,000 rupiah (65 U.S. cents) per liter effective April 1. Finance Minister Agus Martowardojo said the government agreed with today’s vote.
Bad Impact
Maintaining subsidies “would5 have a really bad impact” on growth by causing the fiscal deficit to exceed the legal limit of 3 percent of gross domestic product, forcing cuts in more productive spending, National Economic Committee Vice Chairman M. Chatib Basri said in an interview with Bloomberg Television in Hong Kong on March 23.
Yudhoyono, re-elected in 2009 for a second five-year term, has pledged to increase spending on roads, seaports and airports to help deliver growth of at least 6.6 percent by the end of 2014.
Yesterday’s protests would be the biggest since 2008, when Indonesia last raised fuel prices, according to Dodi Ambardi, a political analyst at Yogyakarta-based Gadjah Mada University and Nico Harjanto, a public policy analyst at Jakarta-based Rajawali Foundation.
“Increasing fuel prices is a sensitive issue not only for Indonesia but for all countries,” Changyong Rhee, chief economist at the Asian Development Bank, said in Jakarta earlier this week.
Debate
Indonesia’s lawmakers began debating the government’s proposal to raise subsidized fuel prices early this month.
Lawmakers delayed a vote on the subsidy that had been scheduled for March 29, and were considering whether to revoke a law that requires parliamentary approval for any increase in fuel prices, Tamsil Linrung, deputy chairman of the budget committee, said earlier this week.
Protesters, including college students, members of labor unions, political parties and non-government organizations have rallied every day since March 27 at “vital assets” such as government offices, airports and ministries, National Police Spokesman Saud Usman Nasution said by phone in Jakarta yesterday.
The National Police estimated 81,135 people would take to the street yesterday across Indonesia’s 17,000 islands, which span 5,150 kilometers (3,200 miles), the distance from Florida to Alaska. There would probably be about 9,900 protesters in Jakarta, Nasution said.
Security
Indonesia deployed 22,000 police and army personnel in Jakarta, Nasution said. The police have standby security personnel as well, he said.
Protests turned violent in Sulawesi island and North Maluku province this week, where demonstrators took over a runway at Sultan Babullah airport and destroyed equipment, Nasution said. Live images broadcast on TV news stations in Jakarta showed people throwing rocks and setting fires.
On March 29, about 2,500 demonstrators sang songs and mingled with police outside the presidential palace and parliament in Jakarta to protest the fuel-price plan.
About 1,500 people sat in front of parliament as Indonesian lawmakers debated the proposal. Another 1,000 protests gathered in front of the palace, according to Jakarta police spokesman Rikwanto.
“The protests are not to topple the president, but to oppose the fuel price increase,” said Umar Juoro, an economist at the Center for Information and Development Studies. “For sure, his popularity will6 fall due to his unpopular policy; on the other hand, he has to do that.”
Indonesia’s state oil company PT Pertamina sells subsidized petrol at retail stations for 4,500 rupiah a liter (about $1.85 a gallon), according to Indonesia’s energy ministry.
Non- subsidized high-octane gasoline costs as much as 10,000 rupiah a liter ($4.13 a gallon).
Gasoline in India, which is not subsidized, costs 65.64 rupees ($1.28) a liter ($4.84 a gallon) in New Delhi. Diesel, which is subsidized, is sold at 40.91 rupees a liter ($3.03 a gallon), according to Indian Oil Corp. (IOCL)’s website.
Regular gasoline at U.S. pumps, averaged nationwide, cost $3.921 on March 28, according to AAA, the nation’s biggest motoring club. Diesel cost $4.147 a gallon as of March 26, according to the U.S. Department of Energy. (Bloomberg/ea)
Keterangan :
4. Indonesia’s parliament amended a law to allow the government to raise fuel prices should4 crude exceed a budget assumption, paving the way for an increase even as the biggest public protests since 2008 threaten President Susilo Bambang Yudhoyono’s efforts to contain the budget gap.
- Should crude exceed a budget assumption, fungsinya = 90% certainty
5. 5. Maintaining subsidies “would5 have a really bad impact” on growth by causing the fiscal deficit to exceed the legal limit of 3 percent of gross domestic product, forcing cuts in more productive spending , National Economic Committee Vice Chairman M.
- Would have a really bad impact, fungsinya = preference
6. “The protests are not to topple the president, but to oppose the fuel price increase,” said Umar Juoro, an economist at the Center for Information and Development Studies. “For sure, his popularity will6 fall due to his unpopular policy; on the other hand, he has to do that.”
- his popularity will fall due to his unpopular policy, fungsinya = 100% certainty
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