(MENAFNEditorial)
JAKARTA April 13 2015─Bank Indonesia is ready to strengthen derivatives transactions regulations especially the cross currency swap (CCS) to improve risk management in hedging transactions.
Director of Financial Deepening Task Force of Bank Indonesia Nanang Hendarsyah said the strengthening was done line with the increasing demand for CCS transaction.
Nana said there will be two regulations which will be revised to follow the conditions in the money market.
Changes made on a regulation which was launched late last year namely the Bank Indonesia Regulation (PBI) No.16/16/PBI/2014 on to the amount of Foreign Currency Transactions using Rupiah between the Bank and Other Domestic Parties and No.16/17/PBI/2014 on Foreign Exchange Transactions using Rupiah between the Bank and Other Foreign Parties.
"Both regulations which is associated with CCS transaction will be revised. In order to have greater certainty" he said Friday (4/10/2015).
The strengthening of these regulations was processed by BI. Nana didn’t dismiss if the derivative transactions tend to be complex because every transaction will have a risk. According to him improvement designed will improve risk management for the transacting parties.
The CCS transaction is a contract between two parties to exchange principal and interest for two different currencies for a certain period. Nana said CCS demand will increase because companies obtaining foreign loans are required to undertake derivative transactions.
Corporate Banking Director of PT Bank Mandiri Tbk Royke Tumilaar said CCS transactions in the company are still low and not many. He said CCS is more complicated than forward and swap transactions.
"CCS is somewhat more complicated but the potential transactions can be up to US$800 million" he said.
Royke said the BMRI stock-coded company’s clients in derivative transactions is the trade sector. Read more..
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