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Bali's Real Estate Market Loses Dollar Touch

Author: Bill Barnett. Category: Real Estate. Posted: 6th May 2015

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A newly introduced regulation in nearby Indonesia is requiring real estate developers and hotels to price and collect goods and services income in local currency.

The government run Bank Indonesia as of March 31st has issued a new directive for compliance with full implementation required by July 1st of this year.

In the past Bali property developers have largely priced products in US dollars and often collected transaction payments on that basis.

Likewise many hotels quote rates in the US currency and contacting with overseas agents is most often done on the same exchange basis.

Indonesia's currency has remained volatile over the past few year and has broadly depreciated against the US dollar and a number of other major currencies.

For businesses who prefer to an option to often take US dollar denominated loans at considerably lower interest rates the those in Indonesian currency, the trading risk has expanded considerably with the new regulation.

As we move through the year of 'disruptive' events, currency play is now becoming a major highlight of hotel and real estate business plans.

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