JAKARTA. Indonesian businessmen established offshore companies to support their export businesses in the early 1990s and not necessarily to avoid tax, former Bank Indonesia ( BI ) governor from 1988-1993 Adrianus Mooy said. During that era, the rupiah was devalued while the oil price declined due to an oil glut that caused an oversupply in the market. The global economy was also contracting, to around three percent a year, he explained. "At that time, Indonesia was an export-oriented country and it was difficult to predict the exchange rate. In the export business, converting the US dollar to rupiah and then reconverting it might cause losses. Thus, it was better to put the money offshore," Mooy said on Thursday.
Offshore companies created to support exports
JAKARTA. Indonesian businessmen established offshore companies to support their export businesses in the early 1990s and not necessarily to avoid tax, former Bank Indonesia ( BI ) governor from 1988-1993 Adrianus Mooy said. During that era, the rupiah was devalued while the oil price declined due to an oil glut that caused an oversupply in the market. The global economy was also contracting, to around three percent a year, he explained. "At that time, Indonesia was an export-oriented country and it was difficult to predict the exchange rate. In the export business, converting the US dollar to rupiah and then reconverting it might cause losses. Thus, it was better to put the money offshore," Mooy said on Thursday.