The central bank will issue a regulation on negotiable certificates of deposits (NCD) and commercial paper, following a regulatory umbrella on the domestic money market released last month to support financial deepening.
The central bank will issue a regulation on negotiable certificates of deposits (NCD) and commercial paper, following a regulatory umbrella on the domestic money market released last month to support financial deepening.
An NCD is a bank-guaranteed paper that can be sold in the secondary market, while commercial paper is a less secured, short-term debt instrument issued by a corporation, typically for financing accounts receivable, inventories and meeting short-term liabilities.
Bank Indonesia (BI) Governor Agus Martowardojo said the central bank and the Financial Services Authority (OJK) were currently coordinating on devising the new regulation, which is expected to be issued this year.
"We want to launch NCDs and commercial paper, which currently are still in early stages of coordination between BI and the OJK in order to launch also the NCD [regulation] this year," Agus said in Jakarta on Monday.
In August, BI issued a regulatory umbrella (PBI) on the money market with the aim to provide clear guidance for the banking industry and encourage more transactions.
Those regulations covers rules relating to all matters, such as instruments, players and the benchmark rate, in an effort to support effective monetary policy transmission.
Instruments now available are BI certificates (SBI), repurchase agreements (repo), commercial papers and negotiable certificates of deposits (NCD). (bbn)
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