Bank Indonesia Changes Jibor Transaction Rules
Jakarta. Bank Indonesia, the country's central bank, released last week a circular letter contains new details on the Jakarta interbank offered rate, or Jibor, regulation as part of the efforts to deepen the country's money market, according to a statement on Monday (30/05).
The central bank will extend the transaction window time to 20 minutes from the previous 10 minutes. It will allow longer rupiah lending period to three months from only a month.
The central bank will also double the maximum transaction allowed to Rp 20 billion ($1.4 million) from the previous Rp 10 billion with the total transaction must not exceed Rp 20 billion a day.
"[The change] is meant to provide more credible market interest rates benchmark, widely used by the people, especially by the banking industry," Tirta Segara, executive director at Bank Indonesia, said in the statement.
"[The increasing use of Jibor] will hopefully create market liquidity and in turn, will deepen the money market."
Jibor is a reference interbank rate derived from unsecured loan transactions offered by one contributor bank to another in Indonesia's money market — which indicates banks' liquidity.
Bank Indonesia said the changes will apply from June 1.
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