No.1/109/BGub/Humas

In accordance with Act No. 24 of 1999, the Government decreed to employ free Foreign Exchange Flow system and thus each resident is free to possess and utilize foreign exchanges. In consequence to the fact that foreign exchanges is one of the financing means and sources necessary to national economy development, while data and information on its activities up till now is not adequately provided, "Therefore an effective monitoring system on foreign exchanges flow is required in anticipation of its negative impact to the national economy," quoted from Senior Deputy Governor, Anwar Nasution, when explaining about Bank Indonesia Regulation on the Monitoring of Bank and Non-Bank Financial Institution (LKNB) in Jakarta today. Anwar furthermore clarified that the supporting monitoring system is expected to provide more information on foreign exchanges flow in a timely manner which is comprehensive and accurate.

The regulation mentioned above (PBI) is the initial implementation guide of Act No. 24 of 1999 on Foreign Exchange Flow and Exchange Rate System, for the Act charges each resident with the duty to submit all data and information concerning his/her foreign exchanges flow activities to Bank Indonesia. Foreign exchanges flow activities of companies or individuals will be stipulated in other PBI. "But please note that transactions on foreign exchange flows executed via a bank and LKNB encompass those transactions of banks, LKNBs, and their customers," added Anwar. Therefore those customers conducting foreign exchange flow activities via banks are

obligated to submit the required data and information to the related bank for reporting purpose to Bank Indonesia.

Banks and LKNBs are obligated to report in a timely manner to Bank Indonesia information on foreign exchanges transactions as well as on assets and offshore liabilities comprehensively and accurately. The information is primarily required for figuring the statistic of balance of payments and of Indonesia's international investment to support the formulation and the improvement of monetary policy effectiveness.

Technical guideto for reporting by banks and LKNBs to Bank Indonesia will be specified in Bank Indonesia Circular Letters, covering among others minimum amount of foreign exchange flow transactions that shall be reported, procedure and administration of the reporting and of the sanction.

It is our plan to have electronic reporting by Banks and LKNBs, which consequently requires preparation on human resources and development of new system within the banking and LKNB sector. The new system is developed in order to avoid Y2K problems.

Bank Indonesia Regulation can be accessed through Bank Indonesia homepage at (http://www.bi.go.id/se-sk/PBI-LLD.pdf - Indonesia version)

Jakarta, November 4,1999

OFFICE OF THE GOVERNOR

Deputy Head of The Office