Regulatory Alerts2014-09-17
Bank Indonesia Regulation Number 16/16/PBI/2014 Concerning Foreign Exchange Transactions against Rupiah between Banks and Domestic Parties
Bank Indonesia issued Regulation Number 16/16/PBI/2014 to deepen the foreign exchange market by establishing comprehensive guidelines for foreign exchange transactions against the Rupiah between banks and domestic parties. The regulation mandates that banks maintain written internal guidelines and requires underlying transaction documentation for transactions exceeding specific thresholds, while allowing spot and derivative purchases up to USD 100,000 and sales up to USD 1,000,000 without such documentation. It further stipulates settlement procedures, prohibits transactions involving structured products or overdrafts for forex purposes, and imposes administrative sanctions and financial penalties on banks that violate these provisions.
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