Indonesia is entering a new regulatory phase in 2026 that will significantly reshape how export-oriented companies manage their foreign currency revenues, particularly US dollars. The 2026 Export Earnings Regulation introduces stricter requirements on how natural resource export proceeds are retained, converted, and utilized within the domestic financial system. For businesses operating in sectors such as mining, plantations, energy, and other commodity-driven industries, this is not merely a compliance issue—it is a fundamental shift in cash flow strategy, treasury management, and financial planning.
This article explores the background, mechanics, and practical implications of the 2026 Export Earnings Regulation, with a specific focus on how companies can manage US dollar cash flow more effectively under the new rules. The aim is to provide a clear, human-readable guide for business owners, finance directors, and foreign investors navigating Indonesia’s evolving regulatory landscape.
Understanding the 2026 Export Earnings Regulation
The 2026 Export Earnings Regulation requires exporters of natural resources to retain their foreign currency export proceeds—commonly referred to as Devisa Hasil Ekspor (DHE)—within Indonesia for a minimum period of one year. These proceeds must be placed in designated state-owned banks rather than offshore accounts or foreign financial institutions.
A key feature of this regulation is the restriction on currency conversion. Exporters may only convert up to 50% of their retained export earnings into rupiah during the retention period. The remaining balance must stay in foreign currency, primarily US dollars, within the domestic banking system.
From a policy perspective, the regulation is designed to increase onshore US dollar liquidity, strengthen Indonesia’s financial resilience, and support exchange rate stability. From a business perspective, however, it introduces new considerations around liquidity access, operational flexibility, and cash flow timing.
Why the Government Is Focusing on US Dollars
The emphasis on US dollar retention is not accidental. Indonesia’s economy, like many emerging markets, remains sensitive to global dollar cycles. During periods of global uncertainty, US dollar liquidity often tightens, putting pressure on local currencies and financial markets.
By requiring export earnings to stay onshore, policymakers aim to ensure that more US dollars circulate within the domestic banking system. This provides additional liquidity for trade financing, debt servicing, and currency stabilization efforts led by institutions such as Bank Indonesia.
In practical terms, the regulation seeks to reduce the historical pattern where export dollars quickly leave the country, limiting the domestic financial system’s ability to respond to external shocks. The 2026 Export Earnings Regulation is therefore as much a macroeconomic tool as it is a regulatory obligation for exporters.
The Scale of Export Earnings Affected
Indonesia is one of the world’s leading exporters of natural resources, including coal, palm oil, nickel, and other strategic commodities. These industries generate tens of billions of US dollars annually. Previous government estimates suggest that stronger export earnings retention could add up to tens of billions of dollars in onshore foreign exchange liquidity each year.
This scale explains why the regulation has attracted attention from both domestic and international stakeholders. For individual companies, the amounts involved can be substantial enough to influence capital expenditure decisions, dividend planning, and cross-border financing structures.
How the Regulation Changes US Dollar Cash Flow Dynamics
Under the 2026 Export Earnings Regulation, companies must rethink how they approach US dollar cash flow management. Previously, exporters often enjoyed broad flexibility in converting export proceeds, transferring funds offshore, or holding balances in foreign banks. That flexibility will now be more limited.
US dollar revenues will remain accessible for permitted uses, such as paying overseas suppliers or servicing foreign currency debt. However, the mandatory retention period means that companies must plan their liquidity needs further in advance. Short-term cash flow gaps that were once covered by rapid currency conversion or offshore transfers may now require alternative solutions.
Liquidity Lock-Up and Working Capital Planning
One of the most significant operational impacts of the 2026 Export Earnings Regulation is the potential for liquidity lock-up. While funds remain legally owned by the exporter, their use is subject to regulatory constraints. This can affect working capital cycles, especially for businesses with high operating costs in rupiah but revenues largely denominated in US dollars.
To mitigate this risk, companies need to strengthen cash flow forecasting and scenario planning. Understanding when US dollar funds can be deployed, converted, or invested becomes critical. Businesses that rely heavily on just-in-time liquidity may need to adopt more conservative treasury practices.
Conversion Limits and Operational Flexibility
The 50% conversion cap into rupiah is another area that requires careful planning. For companies with significant local expenses—such as payroll, utilities, and domestic procurement—this cap may not always align with operational needs.
In practice, this means businesses may increasingly rely on rupiah-denominated financing from local banks to bridge shortfalls. While this is an intended feature of the regulation, it introduces additional considerations around interest costs, collateral requirements, and banking relationships.
Using FX Instruments to Optimize US Dollar Holdings
To address concerns about idle US dollar balances, the government plans to offer domestically issued foreign exchange investment instruments, including FX-denominated bonds. These instruments allow exporters to earn returns on their retained US dollars while remaining compliant with the regulation.
From a cash flow management perspective, this creates an opportunity to transform regulatory compliance into a financial strategy. Rather than viewing retained US dollars as inactive capital, companies can integrate FX instruments into their treasury operations, improving yield without breaching the 2026 Export Earnings Regulation.
Impact on Foreign-Owned Companies
Foreign-owned companies and multinational groups often face additional complexity. Many operate under global treasury frameworks that centralize cash management offshore. The new regulation requires adjustments to these frameworks, particularly for Indonesian subsidiaries involved in natural resource exports.
Dividend repatriation timelines, intercompany loan structures, and transfer pricing arrangements may all need to be reviewed. Early alignment between local finance teams and global headquarters will be essential to avoid compliance risks and cash flow disruptions.
Strategic Adjustments Businesses Should Consider
To adapt effectively to the 2026 Export Earnings Regulation, companies should consider several strategic adjustments. Strengthening internal treasury governance, revisiting banking partnerships, and improving coordination between finance, tax, and legal teams are all critical steps.
In addition, businesses should assess how retained US dollar balances fit into their broader risk management strategy. Currency risk, interest rate exposure, and liquidity buffers should be evaluated holistically rather than in isolation.
Frequently Asked Questions (FAQ)
What is the main objective of the 2026 Export Earnings Regulation?
The regulation aims to increase onshore US dollar liquidity, strengthen Indonesia’s financial system, and support exchange rate stability by requiring export earnings to remain within the domestic banking sector.
Does the regulation apply to all exporters?
The primary focus is on exporters of natural resources. However, businesses should always verify whether their specific activities fall within the regulated categories.
Can companies still use US dollars to pay overseas suppliers?
Yes. Retained export earnings can generally be used for permitted foreign currency obligations, including international trade payments and foreign debt servicing.
Is full conversion to rupiah prohibited?
Full conversion is not allowed during the retention period. Companies may convert up to 50% of retained export earnings into rupiah, subject to applicable rules.
Are there investment options for retained US dollars?
Yes. The government plans to offer FX-denominated investment instruments to help companies earn returns on retained foreign currency balances.
Conclusion
The 2026 Export Earnings Regulation marks a decisive shift in how Indonesia manages foreign currency inflows from its natural resource sector. For businesses, especially those handling significant US dollar revenues, the regulation introduces both challenges and opportunities.
Effective US dollar cash flow management under this new framework will depend on proactive planning, strong financial governance, and a clear understanding of regulatory boundaries. Companies that adapt early and strategically are more likely to maintain operational flexibility while remaining fully compliant.
Navigating the 2026 Export Earnings Regulation requires more than surface-level compliance. It demands strategic insight into cash flow planning, regulatory interpretation, and corporate structuring. CPT Corporate works with local and foreign-owned companies to help them adapt to Indonesia’s evolving regulatory environment—efficiently, compliantly, and sustainably.
If your business is affected by the 2026 Export Earnings Regulation and you want to ensure your US dollar cash flow strategy remains robust, reach out to CPT Corporate today for tailored advisory support.
