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🇮🇩 Indonesia /Economy & Trade

BI: Tourism Transactions in Indonesia Must Use Rupiah

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Official statement Context piece
  • Bank Indonesia (BI) insists that all tourism transactions within Indonesia must be conducted in rupiah, citing the currency's legal tender status.
  • While international trade contracts can use foreign currencies, tourism is not exempt, causing concern for travel agencies who wish to list prices in dollars.
  • The rupiah has recently weakened against the dollar, prompting BI to raise interest rates, though volatility persists.

Bank Indonesia (BI) has reiterated that all transactions within Indonesia's tourism sector must be settled in rupiah, emphasizing its status as legal tender. This directive applies despite the sector's significant contribution to foreign exchange earnings, which some argue should allow for flexibility.

Ronald Dungdung Parluhutan, Deputy Head of BI's Bali Province Representative Office, stated that using rupiah in domestic transactions is crucial for maintaining exchange rate stability and asserting national currency sovereignty. While BI regulations permit foreign currency use in international trade contracts, the tourism sector is explicitly not included in this exemption.

The rupiah is legal tender in the territory of the Republic of Indonesia.

— Ronald Dungdung ParluhutanDeputy Head of the Bank Indonesia Representative Office for Bali Province, explaining the mandate for using rupiah in domestic transactions.

This stance has created a dilemma for Indonesian travel agencies. Putu Winastra, Chairperson of the Indonesian Travel Agency Association (Asita) Bali, expressed a desire for the option to list tour package prices in foreign currencies like the US dollar. He noted that when the dollar strengthens, selling packages in rupiah places a significant burden on businesses due to increased costs for necessities. However, listing prices in foreign currencies on official websites carries the risk of legal repercussions.

The call for rupiah usage comes amid recent currency fluctuations. The rupiah has weakened considerably against the US dollar, surpassing the 18,000 mark at one point. In response, Bank Indonesia implemented several measures, including raising its benchmark interest rate multiple times. While these actions have helped the rupiah strengthen and move away from the critical threshold, it remains volatile, trading at Rp17,845 per US dollar on Friday morning.

The tourism sector and its stakeholders contributed to strengthening the value of the rupiah by 'exporting' tourism services.

— Putu WinastraChairperson of the Indonesian Travel Agency (Asita) Bali, arguing for flexibility in pricing.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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