Indonesia proposes dollar deposit offer to attract remittances back to the country

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The Finance Minister has announced that special incentives will be introduced within a month to encourage Indonesian citizens abroad to transfer their dollar deposits back into the domestic banking system.The policy, which is part of President Prabowo's economic strategy, is expected to attract billions of dollars in overseas deposits back to replenish the country's foreign exchange reserves (which currently stand at about $138 billion).

The government plans to provide tax breaks and interest rate concessions, simplify the process of cross-border transfers, and prioritize support for dollar financing of strategic projects.The relevant policies will enhance commercial banks' dollar liquidity (the current deposit-to-loan ratio reaches 92%), reduce the cost of financing the government's external debt (about $24 billion of external debt maturing in 2026), and provide foreign exchange support for import-substitution industries such as nickel processing and new energy.

Currently, about 5 million Indonesian citizens abroad hold assets abroad, with remittance income amounting to $12 billion in 2024 (World Bank data).

The Minister of Finance stated thatThe policy will "realize a win-win situation for the State, banks and depositors", while requiring financial institutions to strengthen anti-money laundering supervision.

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