BI Enables Banks Customer to Hedge Foreign Currency Transactions

Bank Indonesia (“BI”) Regulation No. 15/8/PBI/2013 on Bank Hedging Transactions (“Regulation”) was recently issued to enable bank customers[1] to hedge their foreign currency transactions (transaksi lindung nilai) in an  effort to minimize financial risks in the current economic environment in which the   value  of the IDR against foreign currencies is fluctuating.

Hedge transactions are usually carried out by bank’s[2] customers to mitigate future risks or to maintain the value of their assets, obligations, revenues, and encumbrances against future fluctuations in the value of currencies (Art. 1 (4), Regulation).