JAKARTA . Bank Indonesia ( BI ) demonstrate commitment to encourage
the use of hedging transaction or hedging foreign currency in domestic financial
markets . One of them , launching a new rule on the matter . The existence of
this legal certainty for banks to protect foreign currency exposure .
In the new beleid , BI will allow banks to hedge non - residence with the tenor under three months .
This allows the investor more flexibility to hedge for investment purposes . " The rule is already in table BI Governor ( Nasution ) . Hopefully August is rising , " said Executive Director of the Department of Monetary Management BI , Hendar , Friday ( 8/3 ) .
The new rules will encourage an increase in the derivatives market in Indonesia . The existence of the protective equipment will make risk management a better exchange rate . In effect, the financial markets will deepen. " Right now our financial markets more spot transactions , derivative transactions are still very limited , " added Hendar .
In the new beleid , BI will allow banks to hedge non - residence with the tenor under three months .
This allows the investor more flexibility to hedge for investment purposes . " The rule is already in table BI Governor ( Nasution ) . Hopefully August is rising , " said Executive Director of the Department of Monetary Management BI , Hendar , Friday ( 8/3 ) .
The new rules will encourage an increase in the derivatives market in Indonesia . The existence of the protective equipment will make risk management a better exchange rate . In effect, the financial markets will deepen. " Right now our financial markets more spot transactions , derivative transactions are still very limited , " added Hendar .
Information only, rules on hedging is set BI in Bank Indonesia
Regulation ( PBI ) No. . 7/14/PBI/2005 restrictions on rupiah transactions and
foreign currency lending by banks . But , in the rule, BI restrict the sale of
derivative transactions against the rupiah exchange of non - residence a maximum
of U.S. $ 1 million with the lowest three-month tenor .
In addition to shorten the tenor , before BI has launched a foreign exchange export proceeds rules ( DHE ), which requires exporters to send money from their sales to domestic banks . BI also lay the regulations absorption of liquidity through term foreign currency bank deposit ( TD ) exchange. It's a way out for the excess foreign exchange bank .
Through a foreign exchange hedging rule is , in fact the central bank wants to restore the liquidity management of banks' foreign currency . So , in the future , BI does not bother to absorb excess liquidity in foreign exchange . It's certainly the monetary savings bank.
As we know , the central bank released the TD FX for a while . The goal is to not play the advantages of foreign banks in foreign countries, as long as this . Thus, exchange rate movements become more stable .
In addition to shorten the tenor , before BI has launched a foreign exchange export proceeds rules ( DHE ), which requires exporters to send money from their sales to domestic banks . BI also lay the regulations absorption of liquidity through term foreign currency bank deposit ( TD ) exchange. It's a way out for the excess foreign exchange bank .
Through a foreign exchange hedging rule is , in fact the central bank wants to restore the liquidity management of banks' foreign currency . So , in the future , BI does not bother to absorb excess liquidity in foreign exchange . It's certainly the monetary savings bank.
As we know , the central bank released the TD FX for a while . The goal is to not play the advantages of foreign banks in foreign countries, as long as this . Thus, exchange rate movements become more stable .
Director of Bank CIMB Niaga , Arwin Rashid , said the bank does
require hedging as mitigating the risks arising from exchange rate fluctuations
. The need for hedging with the tenor of the shortest to longest , because the
foreign funds coming into the bank did not all long-term . "If funds are
short-term period should use the medium-term hedging , " said Arwin .
Head of International Division of Bank BNI , Abdullah Word Wibowo , said the establishment of foreign exchange and hedging instruments are necessary for the stability of the national economy . But in order to develop this market still require a long time . " It takes socialization to the community about the products and functionality to drive demand , when demand slightly lazy banks offer this product because the cost is definitely high , " he said .
Head of International Division of Bank BNI , Abdullah Word Wibowo , said the establishment of foreign exchange and hedging instruments are necessary for the stability of the national economy . But in order to develop this market still require a long time . " It takes socialization to the community about the products and functionality to drive demand , when demand slightly lazy banks offer this product because the cost is definitely high , " he said .
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