Photo by Bank Indonesia

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) introduced a new overnight interbank rate called IndoNIA, which will replace the Jakarta Interbank Offered Rate (JIBOR), said the central bank on Wednesday (01/08). The new instrument was scheduled has begin today at 19:30 pm.

Affandi Yoga, BI’s head of financial market deepening, said the IndoNIA will accelerate monetary policy transmission.

IndoNIA is based on the settlement rate from transaction, while JIBOR is bases on rate quotation that BI collects from 24 contributing banks. BI will publish both reference rates until January 2, when IndoNIA will become the sole reference for interbank transaction.
On Tuesday (31/07), Coordinating Minister for Economic Affairs Darmin Nasution informed, BI has plan to lowered the foreign exchange (FX) swap transaction fee to hold the U.S dollar stayed in the country.
Recently, President Joko Widodo has said to chasing U.S dollars through policy mix to keep a widening current-account deficit (CAD). Based on government data, of the 100 percent export revenues, only 85 percent are reentered the country.
Therefore, he said, the government racked the brain for foreign exchange can be taken home and converted to rupiah maximally.
The central bank rolled out the FX swap for the first time in 2013 to strengthen the financial market and U.S dollar supply in the country and to anticipated of increasing external risks for the Rupiah in 2014. BI begun the FX swap transactions with tenors of three, six and 12 months.
The combination of capital outflows and Indonesia’€™s high current-account deficit has made the Rupiah Asia’€™s worst-performing currency in this year, having depreciated around 9 percent since early January.
“In terms of foreign exchange, BI is finalizing the rules on swap to be more competitive. One way out is to lowered the swap transaction fee,” he said.
Email: linda.silaen@theinsiderstories.com

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