'The benefit is that our balance of payments will improve,' Mr Raden Priyono, chairman of upstream oil and gas regulating body BP Migas, told Dow Jones Newswires.

Mr Priyono said the new policy could bring in around US$11 billion (S$16.8 billion) to the country next year.

The directive will compel the energy concerns to park their money in domestic institutions. That will increase banks' access to US dollars, dealers said.

Typically energy companies conduct their business in US dollars.

A dearth of the US currency has contributed to the gumming up of the dollar lending markets and to downward pressure on the rupiah, which slumped to 10-year lows on Thursday of 12,250 against the greenback.

Indonesia recorded a US$1.5 billion current account deficit in the second quarter, its first since the third quarter of 2005.

Analysts said the deficit had contributed to the rupiah's 23-per cent slide against the dollar this year.

But Indonesian Petroleum Association executive Suyitno Patmokusumo said the domestic operations of most oil and gas companies were already banking with local institutions.

The companies will seek clarification from BP Migas on the directive, he said. -- AFP