New BI Regulation Expands Available Facilities to Include Foreign Currency Transactions

Bank Indonesia (“BI”) has issued Regulation No. 14/5/PBI/2012 (“Regulation 14/2012”) on Amendment to Bank Indonesia Regulation No. 12/11/PBI/ 2010 (“Regulation No. 12/2010”) on Monetary Operation.

Regulation 14/2012 was issued to improve BI’s effort to manage liquidity in Indonesia’s foreign currency market, as part of realizing its monetary policy objectives. It also aims to provide tools for depositing foreign reserves, including those derived from exports.

Under Article 4 of Regulation 12/2010, Bank Indonesia has two Monetary Operation tools: Open Market Operation (“OMP”) and Standing Facilities in Rupiah (providing lending/deposit).