The Indonesian government will order oil and gas companies to use local banks to keep tens billions of U.S. dollars of funds for energy projects as an effort to boost falling rupiah, the oil-and-gas regulator body BP Migas said?on Thursday.
The effort comes as the country is struggling to strengthen rupiah value against the U.S. dollar which has touched to the lowest level of more than 12,000 following the global financial routs.
"This policy aims to help boost rupiah value against the dollar, " BP Migas deputy for finance Djoko Harsono told Xinhua by phone.
According to the deputy, the biggest Southeast Asia economy plans to finance oil and gas projects over 11 billion U.S. dollars in 2008 and 12 billion U.S. dollars in 2009.
He said that the order would be imposed within one or two months.
"We wants contractors in energy projects to put all their U.S. dollars funds in local banks, especially state-owned banks," he said.
According to the deputy, not all of the contractor's funds so far, have been kept in national banks.
The country's central bank has restricted purchasing of U.S. dollars and provided assistance funds for local banks in a bid to maintain the value of rupiah in a rational level and restore confidence on economy. The financial authorities have also ordered people to release their U.S. dollars rather than to keep them.
The global economic turmoil has led investors sell off their assets from emerging market, including in Indonesia, which depreciated rupiah value by up to 20 percent low against the dollar.
Indonesia imported a number of essential products such as foods, failure to stabilize rupiah will raise pressure cost the import payment which could disturb the country's balance of payment.
Indonesia has been gearing up for massive energy projects to support rising energy demand amid the declining of oil and gra products due to aging wells and low investment.
The country's oil production has been declined to below one million barrel a day since February, and led Indonesia to become a net oil importer country.
(Xinhua News Agency November 20, 2008)
