Hotels in Bintan no longer accepting Singapore dollars

Several hotels and resorts in the Indonesian island of Bintan have stopped accepting Singapore dollars since the start of this month, citing a government policy that requires all transactions to be made in the Indonesian rupiah.

Five hotel operators, including Banyan Tree Bintan and Nirwana Gardens, told TODAY that they had been told not to accept foreign currencies. Prior to this, Singapore and American dollars were allowed to be used on the island, the operators said.

The Indonesian Embassy in Singapore, however, said the rupiah-only policy is not a new one. An embassy official from its information, social and cultural department referred TODAY to a Bill passed by the Indonesian Parliament in May 2011, which requires all financial transactions within Indonesia to be made in rupiah.

An online report posted on legal firm Allen & Overy’s website said the currency law took effect on June 28 that same year, but does not apply to “transactions related to the state budget, grants given by or to a foreign state, international commercial transactions, bank deposits denominated in foreign currencies and international finance transactions”.

While it is not clear why the law is being enforced only now, a report by the Antara news agency in June this year said the Bank of Indonesia is encouraging people to use the rupiah in their transactions ahead of the establishment of the ASEAN Economic Community next year.

“Bank of Indonesia has asked all entrepreneurs and the Indonesian community to use the rupiah currency in every transaction across the nation, as the bank feared that other countries will be one step ahead of Indonesia,” the central bank’s Deputy Governor Ronald Waas had been quoted as saying.

Some travel agencies in Singapore said they had not been told about the rupiah-only policy. But an Asia Travel spokesperson said the company had been told by local operators in Bintan that travellers must use only the rupiah because of a “new government policy”, although it did not receive any official notification. Several travellers described the currency restrictions as inconvenient, but added that they will not be deterred from visiting Bintan.

Communications specialist Chua Ee Ghim, 27, is concerned about carrying too much cash as the rupiah comes in far smaller denominations than Singapore dollars. “I have to be very careful in keeping my notes and ensure that shopkeepers give me the correct change,” he said.

The policy appears to have not taken effect in Batam yet. Batam is another Indonesian island popular with Singaporeans seeking short getaways.

Three resorts there told TODAY that they still accept payment in Singapore dollars. Batam was in the news last month after Indonesian immigration officials at the Batam Centre began sending ferry passengers back to Singapore for talking too loudly.

Source: Channel NewsAsia