Indonesia’s banking sector has seen a sharp rise in US dollar deposits as exporters comply with new foreign exchange rules, strengthening domestic liquidity and supporting the rupiah.
Indonesia’s banking system is experiencing a significant increase in US dollar deposits following the implementation of stricter rules governing export proceeds (DHE) from natural resources. The policy, which requires exporters to retain a larger share of their foreign exchange earnings in the domestic financial system, has driven a sharp increase in foreign currency accounts while providing banks with additional liquidity.
According to the Financial Services Authority (OJK), foreign currency deposits in Indonesian banks jumped 58.2% year-on-year, reflecting the early impact of the government’s new DHE regulation. The surge comes just weeks after exporters became subject to stricter retention requirements under Government Regulation No. 21 of 2026, which aims to keep export earnings within Indonesia for a longer period.
Key Facts
- Growth in US dollar deposits: 58.2% year-on-year.
- Policy driver: Mandatory placement of natural resource export proceeds (DHE) in the domestic banking system.
- Effective implementation: June 1, 2026.
- Supporting instruments: Bank Indonesia offers foreign currency term deposits with tenors of 1, 3, 6, and 12 months for DHE funds.
The policy is intended to do more than strengthen bank funding. By retaining export earnings domestically, the government hopes to increase foreign exchange liquidity, reduce pressure on the rupiah, and deepen Indonesia’s financial markets. Bank Indonesia has complemented the initiative by introducing dedicated foreign-currency investment instruments, allowing exporters to earn competitive returns while keeping their funds within the domestic financial system.
For commercial banks, the influx of dollar deposits provides a larger pool of foreign currency funding that can support trade finance, corporate lending, and foreign exchange transactions. Greater liquidity could also reduce banks’ reliance on overseas funding and improve resilience during periods of global financial volatility.
The rise in dollar deposits is an encouraging sign that Indonesia’s external liquidity position is improving. Combined with stronger foreign exchange reserves and broader financial market reforms, the DHE policy could help strengthen macroeconomic stability. The real test, however, will be whether these additional foreign currency inflows translate into deeper capital markets, stronger bank lending, and more sustainable long-term investment.