Regulatory Alerts2022-07-08
Regulation of Member of Board of Governors Number 24/11/PADG/2022 on Domestic Non-Deliverable Forward Transactions
Bank Indonesia issued Regulation Number 24/11/PADG/2022 to establish the regulatory framework for Domestic Non-Deliverable Forward (DNDF) transactions, aiming to enhance liquidity and efficiency in the domestic foreign exchange market. The regulation mandates that banks ensure DNDF transactions above specific thresholds are backed by valid underlying transactions, such as trade or investment activities, while prohibiting the use of credit or financing to settle these positions. It further defines contract requirements, settlement procedures in rupiah, reference rates, and administrative sanctions for non-compliance to maintain prudential standards.
Share