REPUBLIKA, JAKARTA -- Bank Indonesia (BI) to improve hedging regulation of foreign exchange transactions. This provision based on BI Regulation No.15/17/PBI/2013 and will be implemented on February 3, 2014.

Executive Director of Communication Department in BI, Difi A Johansyah said that provision of swap hedging instruments for domestic participants was directed towards domestic foreign exchange market.

"Instruments of mid-long term swap are still limited," Johansyah said on Monday.

Deepening of domestic foreign exchange market is aimed to minimize risk of exchange rate and increase investment in Indonesia. Some improvements are set in this regulation, such as the expansion of underlying transaction, extension of maturity and settlement of transaction by netting scheme, as well as pricing transaction mechanism.

With these improvements, hedging contracts can be conducted up to three years through swap transaction to BI with tenor of three, six and 12 months. The transaction can be extended by netting scheme. Banks can hedge economic activities on behalf of its customers or company.

Ikuti Whatsapp Channel Republika