Monday, June 6, 2011

The Currency Law

On  31 May 2011, the House of Representatives has enacted the Currency Law.

According to Hukum Online, this Law's Article 21 (1) stipulated that business transactions carried out within the territory of the Republic of Indonesia should use the Rupiah currency. And Article 33 stipulated that violation of this Law would be a Crime that can be punished with a maximum fine of Rp 200 Million, or one year imprisonment.

However, Article 21(2) stipulated that the obligation to use Rupiah does not apply to transactions within the framework of the implementation of state budget revenues and expenditures, receipts or grants from or to foreign countries; international trade transactions; deposits in banks in the form of foreign exchange, or transactions international payments.

Some Lawyers have protested against this new Law, saying that the Lawyer profession has a trans-border scope of activities therefore it is very likely they would use foreign currency

According to Infobanknews  this Law will be valid starting 17 August 2014.

Considering that we still have more than two years before the new Law becomes valid, any businesses that used foreign currencies, including Lawyers etc, should prepare adapting themselves with this new Law


Vainit said...

Nice information for a business man.. hope next two years, I was be a business man Hehehheehhe

Bear Wife said...

Hi Harry,

So what are your views on the new law ? Are you agreeable with this regulation or do you have any other concerns ?

I think it will not impact the ordinary citizens much given that most of day to day trade is already done in Rupiah. But then again..I'm not an Indonesian citizen :p

colson said...

Useful ( and to me not completely understandable) information. I agree with Bear Wife it would be good to read ( or hear in a few weeks?)your opinion on the new law.

Anyhow, I did send your article and links to my entrepreneurial Jakarta based daughter-in-law & son :).

Mas kholiq said...

sekedar absen mas.....

Multibrand said...

I wish you luck.

@Bear Wife,

In order to give a good opinion, first we need to know about the implementing regulation of this law (not yet issued).

Foreign currency (especially USD) has been widely used as barometer by business people in Indonesia for so long, because it has been considered more stable than local currency.

I think that it would be better if transactions between locals and foreigners, and/or involving foreign countries (export-import) are allowed to use foreign currency.
And transactions among locals to use the Rupiah.


My opinion is stated on my response to Bear Wife above.

I'd like to add that countries that forced local currencies tend to have two kinds of money markets i.e Official market and Black market, each of them may have exchange rate which can be very much different, I think this is not healthy for the economy.

Besides, this law also change the issuance of money which is now only done by the central bank (Bank Indonesia), into jointly with the government.

@Mas Kholiq,
Terima kasih.

ibnu said...

hadiiir :)

Multibrand said...

Selamat datang

TUKANG CoLoNG said...

ngomongin hukum jadi inget ama hakim nakal kita.. :D

Multibrand said...

Saat ini memang banyak hakim yang nakal.

Yuli Ayu Pratiwi Lie said...

Heyy politician,
I’ll give you much traffic jam on comments. HAHA

Honestly, I don’t know much about law things that you posts. How should I say.. you are a brilliant writer bout that stuffs. Haha X) silly me

P.S: In blogger, Idk where to write comments at except your blog. I guess you are my friend in blogspot. HAHAHA go multibrand! *LMAO* :P

Anonymous said...

I am always glad to see my violist friend reading my blog giving wonderful comments.I am happy that you like my blog the way I like yours.

Anonymous said...

Dangerous. When the country's currency dries up, as happened in Argentina and is happening in many US communities, local currency based on time is necessary to make purchases of goods and services possible. Folks in the US are expecting the WallStreet-run government to outlaw alternative currency very soon.