Indonesian authorities are working to develop new investment instruments with “good” returns in a bid to retain onshore more than $10 billion that was repatriated under a tax amnesty program three years ago, with officials acting before a lock-in period on the funds expires later this year.
Bank Indonesia, the Ministry of Finance and the Financial Services Authority are preparing the products, Antara news agency reported, citing central bank Deputy Governor Dody Budi Waluyo, without giving details. Investors may not rush to withdraw the money from Indonesia given attractive yields on domestic instruments and improving fundamentals, Waluyo was cited as saying.
The tax amnesty began in 2016 and unearthed some $360 billion in previously undisclosed assets in Indonesia and abroad, with more than 900,000 people taking advantage of the reprieve. An estimated 147 trillion rupiah ($10.4 billion) was repatriated from overseas, with the returned funds locked in for a minimum of three years in assets such as gold, property and infrastructure.
Indonesia’s rupiah is the best-performing Asian currency this year, rebounding about 8 percent from a two-decade low last year, when it was caught up in an emerging markets selloff triggered by rising U.S. interest rates. The local currency’s rally has helped to spur gains in the nation’s bonds and stocks.