JISDOR serves as a reference rate that represents the spot FX rate of the US dollar against rupiah in the interbank FX market, including transactions between domestic banks and offshore banks. “Spot”, in turn, is a basic form of the FX transaction. A call for a “dollar spot” would mean a sale or purchase of rupiah against US dollar through which the settlement date is at least two days following the transaction, including ones settled on the same day (“today”) and one day later (“tomorrow”).

Because of the simplicity of the transaction, the volume of the spot dominates the daily exchange. Hence, the spot rate is representative of the FX market. JISDOR is evidence of BI’s direct involvement in terms of greater monetary stability and market deepening.

BI has decided to improve the design and production of JISDOR via two measures. First, the market observation time (“window time”) will be extended. This means that BI will observe the interbank FX market to render daily JISDOR data for a longer period. JISDOR previously captured spot transactions between 8 a.m. and 9:45 a.m. (GMT+7 or West Indonesia time), and that will be extended to between 8 a.m. and 4 p.m.

Second, as a consequence of the window time extension, the JISDOR publication hour will be moved from 10 a.m. to 4:15 p.m. Subject to the market operational hours during the pandemic, the enhanced JISDOR will be available at 3:15 PM every business day through BI’s official website, with the window time between 9 a.m. and 3 p.m.

The extension of the timing ensures that JISDOR accounts for full-day spot transactions. The market can then rely more on JISDOR, because it captures a more complete picture of “what actually happens” in the market, from the opening until the closing of domestic trading hours. This development will be beneficial for the comprehensiveness of market analysis and exchange rate projections. At best, it pays off with the improvement of business decision quality as well as policies for relevant authorities, including the genuine interest of BI in functioning stable monetary and financial systems.

The reference rate is substantial for the FX market in many ways. A more reliable and robust reference rate will benefit the market with more confidence, especially for those who are contracting under the arrangements of JISDOR. The opportunity to generate a more liquid market is also greater, as JISDOR would likely drive a more credible pricing reference. Moreover, a better-conceived reference rate would bring a better measure for market participants to avoid disruption, such as market abuse.

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