Economics

Bank Indonesia to Beef Up Tools in Battle to Shield Rupiah

Interest-rate swaps, overnight index swaps being considered
Central bank weighs offering short tenor forex swap hedging

Indonesia is trying to protect the rupiah, while Malaysia is set to keep rates steady. Kathleen Hays reports,(Source: Bloomberg)

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By Rieka Rahadiana and Eko Listiyorini

September 3, 2018 at 9:00 PM UTC

Updated on

September 4, 2018 at 11:02 AM UTC

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Indonesia’s central bank is intensifying its fight to protect the nation’s currency and bonds with a slew of measures that includes more hedging tools.

Bank Indonesia plans to soon introduce overnight index swaps and interest-rate swaps to widen its pool of hedging tools for investors, exporters and banks. The central bank will also start offering a one-month tenor foreign-exchange swap hedging facility, said Nanang Hendarsah, executive director for monetary management.