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O’Melveny’s Hogarth Authors Article on Indonesian Currency LawSeptember 06, 2011 O’Melveny Corporate Finance/Capital Markets Practice Group partner Joel Hogarth recently authored an article about the potential impact of Indonesia’s new currency law on the conduct of foreign currency denominated transactions in Indonesia for the September 2011 edition of International Financial Law Review. In “Indonesian Currency Law: Don’t Panic,” Hogarth, who resides in the Firm’s Singapore office, discusses key provisions of Indonesia's new Currency Law formalizing the status of the rupiah as legal tender, which may have significant implications for the conduct of foreign currency denominated transactions in Indonesia.
Hogarth reviews the law’s mandatory and prohibitory provisions, describes how regulations and sanctions will be implemented, and identifies the practical implications, problems, and opportunities presented by the new law. He concludes that “[l]ike the equally controversial law on Language (No. 24/2009) passed two years ago, the Currency Law is likely to be more a speed bump than a road block to the growing internationalization of business in Indonesia,” and that “[c]ommercial solutions are expected to be found whichever interpretation of the Currency Law is adopted.”