Indonesia looks to bring $10bn forex hedging market onshore

Central bank seeks ways to improve corporate risk management

indonesia-rupiah-2016
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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: