JAKARTA - PT Bumi Resources Tbk (BUMI) responded to the government's new policy regarding stricter retention of foreign exchange proceeds from mineral resources exports (DHE SDA).

This policy requires exporters to retain 100% of export proceeds for 1 year, different from the previous regulation which was only 30% for 3 months.

Dileep Srivastava, Director of BUMI, explained that this policy aims to stabilise the rupiah exchange rate and strengthen foreign exchange reserves. However, he also highlighted the challenges that arise, especially in managing the company's cash flow.

‘This change is a significant step that may impact operational liquidity,’ he said on Thursday (30/1).

Srivastava acknowledged that the policy may limit the company's access to funds that are usually used for operational and investment costs. ‘From previously holding only 30% for 3 months, it now has to be 100% for 12 months. This could strain financial resources, especially if exporters have to adjust their cash flow strategy,’ he explained.

Even so, BUMI has prepared several mitigation strategies to deal with this change. The company will expand its domestic market and increase its focus on domestic sales.

In addition, BUMI will utilise the time deposit instrument introduced by the central bank. This move is expected to help the company's liquidity with more competitive returns.

Another strategy is to review cash flow management to ensure liquidity remains secure while complying with the new regulations.

‘We will ensure readiness in facing this regulation in order to maintain the company's financial stability,’ he concluded.

Previously, the Coordinating Minister for Economic Affairs, Airlangga Hartarto, revealed that a 100% DHE retention policy for 1 year had been agreed by the government. This step is believed to increase Indonesia's foreign exchange reserves to above US$90 billion. (DK/LM)