Indonesia to urge nationals to bring home funds, help rupiah

JAKARTA (REUTERS) - Indonesia is considering incentives to encourage its nationals to repatriate some of their vast overseas currency holdings and support the rupiah , Asia's weakest currency.

The rupiah has slumped nearly 20 per cent this year, more than any other currency in the region, and has taken a hit this month because of a shortage of dollars in the market ahead of the year-end.

"Together with the government, we are discussing a scheme that can ... (repatriate) Indonesian money overseas," Bank Indonesia Governor, Mr Agus Martowardojo, told reporters.

He did not say how much money Indonesians hold overseas but some economists have estimated it could be around US$100 billion (S$125 billion) , which is slightly higher than the country's foreign currency reserves.

The rupiah has come under heavy pressure because of a widening current account deficit and concerns that once the US Federal Reserve starts to taper stimulus, it would trigger a rush of funds out of the country.

Mr Martowardojo did not specify what the incentives might be but other officials have previously suggested the possibility of tax benefits.

Earlier, he urged exporters and others holding foreign currency to exchange it into rupiah to ease a dollar shortage in the local market.

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