On 1 June 2015, Bank Indonesia issued a circular letter No. 17/11/DKSP on the Obligation to Use Rupiah in the Territory of Indonesia (“Circular Letter”) to supplement Bank Indonesia’s Regulation No. 17/3/PBI/2015 on the Obligation to Use Rupiah in the Territory of Indonesia issued on 31 March 2015 (“Regulation”). The Regulation contains broad provisions requiring, among other things, that Rupiah is used to settle financial obligations and other payment transactions taking place in the Territory of Indonesia (unless certain limited exemptions apply). The Circular Letter emphasizes the territorial principle underlying the obligation to use Rupiah and seeks to clarify certain provisions under the Regulation, including with regards to the “strategic infrastructure projects” exemption, the obligation imposed on business entities to state the price for goods and/or services in Indonesia only in Rupiah, and the means to be used by Bank Indonesia to monitor compliance with the Regulation.
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