Regulatory Alerts2018-09-28
Bank Indonesia Regulation Number 20/10/PBI/2018 Concerning Domestic Non-Deliverable Forward Transactions
Bank Indonesia issued Regulation Number 20/10/PBI/2018 to establish a regulatory framework for Domestic Non-Deliverable Forward (DNDF) transactions, aiming to enhance liquidity and efficiency in the domestic foreign exchange market. The regulation permits banks to conduct DNDF transactions for hedging rupiah exchange rate risks, provided they are supported by underlying transactions and settled via a fixing mechanism in rupiah. It further mandates strict documentation, reporting, and supervision requirements, with specific administrative sanctions for non-compliance.
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