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Indonesia needs new clearing house for forex, derivatives: BI
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Rupiah and the US Dollar notes are arranged side by side in a bank. (Antara/Rosa Panggabean)
T
he central bank is considering the establishment of a new Central Counterparty (CCP) clearing house to deepen the market and reduce the credit risk and systemic risk of foreign exchange transactions in financial markets.
During a seminar entitled "Central Counterparty Clearing Development in India, lesson learnt" held at the Bank Indonesia (BI) office, BI senior deputy governor Mirza Adityaswara said market deepening had been its major concern for around five years due to its slow progress.
"As part of developing market infrastructure, Indonesia needs to establish a new CCP, an institution where clearing and settlement of financial transactions takes place," Mirza said in Jakarta on Thursday.
Currently, Indonesia has PT Kliring dan Penjaminan Efek Indonesia (KPEI), as the capital market clearing house, and PT Kliring Berangkat Indonesia (KBI) as well as PT Indonesia Clearing House (ICH) for commodities and futures markets.
"However, we are yet to have a CCP for foreign exchange, derivatives, the money market and bonds transactions," he added.
With the development of the CCP, he expects the volume of foreign exchange and derivatives transactions to increase, which eventually will create market deepening. (ags)
