Bank Indonesia to Start Taking Non-Dollar Swap Hedge
JULY 11, 2017
Jakarta. Indonesian central bank said on Tuesday (11/07) it will start entering into non-dollar currency swap hedging transactions with commercial banks to support efforts to broaden the use of foreign currencies across the economy.
Bank Indonesia said in a statement it will start taking swaps for hedging purposes on Wednesday, opening a two-hour window for such transactions per week.
The central bank, which hopes to lower the economy's dependence on the dollar in trade and finance and maintain rupiah's stability, will start with Japanese yen swap hedge and follow up later with the euro and Chinese yuan.
"This policy by Bank Indonesia is expected to support investment and international trade activities which are diversified in various currencies," the statement said.
Banks will be allowed to do non-dollar swap hedging with the central bank based on underlying transactions, it added.