Mandatory use of Rupiah in Indonesia


Bank Indonesia (“BI”) has issued Regulation No. 17/3/PBI/2015 regarding the Obligation to Use Rupiah in the Territory of Republic of Indonesia (“PBI 17/2015”). This PBI 17/2015 is the implementing regulation of Law Number 7 Year 2011 regarding Currency.


PBI 17/2015 requires every transaction within Indonesian territory be made in Rupiah. Transaction means both cash and non-cash transactions which include:

  1. any payment transactions;
  2. other obligation settlements which must be fulfilled with money; and/or
  3. other financial transactions.

However, the following transactions are exempted from such mandatory use of Rupiah:

  1. certain transactions with respect to the implementation of state budget (“APBN”);
  2. receipt or provision of overseas grants (hibah);
  3. international trade transactions;
  4. bank savings in foreign currencies; or
  5. international financing transactions.

For any transaction which is not exempted from mandatory use of Rupiah, it is prohibited to refuse to accept Rupiah as payment or settlement, unless the genuineness of the Rupiah banknote received is doubted (in cash transactions), or such payment or settlement in foreign currency has been agreed upon in a written agreement. However, this written agreement can only be made for transactions which are exempted from mandatory use of Rupiah, or strategic infrastructure projects approved by BI. Furthermore, PBI 17/2015 requires that quoting goods or services within Indonesian territory must also be in Rupiah.

Sanctions under PBI 17/2015 are as follows:

  1. criminal sanction for violation of mandatory use of Rupiah for cash transactions is imprisonment of 1 year maximum and penalty of Rp. 200.000.000,- (two hundred million Rupiah) maximum;
  2. administrative sanction(s) for:
  • violation of mandatory use of Rupiah for non-cash transactions are written reprimand, payment obligation (1% of the transaction value or up to one billion Rupiah), and prohibition to participate in any payment transactions.
  • violation of quoting in Rupiah and reporting obligation (if so requested by BI) is written reprimand.

Any written agreement concerning payment or settlement in foreign currency, other than those for transactions exempted from such mandatory use of Rupiah or strategic infrastructure projects as above, which was made and entered into before 1 July 2015 remains valid until such agreement expires or terminated. The extension and/or amendment thereof are subject to PBI 17/2015.

BI may apply certain policies if there is any difficulty, with certain characteristics, in implementing such mandatory use of Rupiah for non-cash transactions faced by any parties relevant to PBI 17/2015.

BI Circular Letter

To clarify the provisions of PBI 17/2015, on 1 June 2015 BI issued Circular Letter No.17/11/DKSP (“SEBI 17/11/DKSP”). Based on SEBI 17/11/DKSP, PBI 17/2015 adheres to territorial principle, which means that every transaction within Indonesian territory, either done by resident or non-resident, in cash or non-cash, must be made in Rupiah.

The exempted transactions are further elaborated under the SEBI 17/11DKSP, which is as follows:

a. transactions with respect to APBN include:

  • payment of overseas debt;
  • payment of domestic debt in foreign currency;
  • overseas consumption expenditure;
  • overseas capital expenditure;
  • state revenue generated from state bond in foreign currency; and
  • other transactions with respect to APBN, such as payment of tax, visa on arrival, and non-tax state revenue.

b. receipt or provision of grants which is exempted from such mandatory use of Rupiah is that from or to overseas made by parties in which one of them is an overseas resident

c. international trade transactions include:

  • export and/or import activities to or from Indonesian territory; and/or
  • service provision activities which conducted across state border by means of:
  1. cross border supply, such as online purchasing or purchasing through a call center. Cross border supply also includes persons with certain expertise who are assigned by its overseas principal office to work in Indonesia; and
  2. consumption abroad, such as Indonesians who is studying or having hospital treatment abroad

d. bank savings in foreign currency which are exempted from such mandatory use of Rupiah include savings and deposits in foreign currency.

e. international financing transactions which are exempted from such mandatory use of Rupiah are those carried out by parties in which one of them is overseas resident, such as credit facility by bank in overseas granted to Indonesian customer.

Not only does it require quotation in Rupiah within Indonesian territory, but SEBI 17/11DKSP clarifies that PBI 17/2015 also prohibits dual quotation (Rupiah and foreign currency altogether). Such quotation requirement and prohibition apply to:

  1. price tag;
  2. fee, such as agency fee in property, tourism, consultancy;
  3. cost of lease, such as lease of apartment, house, office, building, land, warehouse, vehicle;
  4. tariff, such as loading tariff at seaport or airfare, cargo;
  5. price list, such as that on restaurant menu;
  6. contract, such as price clause or value agreed upon in the contract or agreement;
  7. offer, order, invoice, such as price clause in invoice, delivery order, purchase order; and/or
  8. proof of payment, such as the amount stated in payment receipt.

The obligation to use Rupiah and the prohibition to have dual quotation also apply to price listing in electronic media.

With regard to the policies BI may apply, any party with certain characteristics may submit an application to BI asking for its discretion to apply policies to resolve the difficulty in implementing the obligation under PBI 17/2015. SEBI 17/11DKSP states that BI, in issuing the policies, considers the readiness, business continuity, investment activity, and/or business activity which has significant impact on national economic growth.

For further information on the implementation or effect of this regulation, please feel free to contact our firm at [email protected].

– article by Hadromi & Partners

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  1. Other financial transactions conducted in Indonesia. However, Bank Indonesia also exempted specific transactions from the mandatory use of rupiah-rule.

  2. There are so many loop holes in this proposal that it is not funny , it is just another way of showing muscle without doing a thing . See if the corrupt politicians stick by these rules .

  3. Pingback:Win 2nights at Padma Bali + Bank New Regulation | Whats New Jakarta

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