Indonesia looks to bring $10bn forex hedging market onshore

Central bank seeks ways to improve corporate risk management

New proposal: Nanang Hendarsah says the plan is to allow corporates to invest in call spreads

New foreign currency hedging rules being drawn up by Bank Indonesia are set to bring a sizeable overseas market for hedging between the rupiah and the US dollar onshore, according to one of its senior officials.

The significant cost of hedging onshore has driven many companies to overseas markets and encouraged them to use cheaper products from global banks – such as call spreads – that dealers are currently barred from offering in the domestic market.

A call spread combines bought and sold call

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