Bank Indonesia Regulation Number 10/14/PBI/2008 - Fourth Amendment to Bank Indonesia Regulation Number 4/9/PBI/2002 concerning Open Market Operations

Unofficial Translation
BANK INDONESIA REGULATION
NUMBER 10/14/PBI/2008
CONCERNING
FOURTH AMENDMENT TO
BANK INDONESIA REGULATION NUMBER 4/9/PBI/2002 CONCERNING OPEN MARKET OPERATIONS WITH THE BLESSING OF THE ONE GOD THE GOVERNOR OF BANK INDONESIA, Considering : a. whereas to enhance effectiveness of open market operations, it is necessary that Bank Indonesia reregulates transaction tenor in Fine Tune Operations; b. whereas pursuant to the consideration set forth in letter a, it is deemed necessary to amend for the fourth time Bank Indonesia Regulation Number 4/9/PBI/2002 concerning Open Market Operations. In view of : Act Number 23 of 1999 concerning Bank Indonesia (State Gazette of the Republic of Indonesia Number 66 of 1999, Supplement to the State Gazette of the Republic of Indonesia Number 3843) as amended by Act Number 3 of 2004 (State Gazette of the Republic of Indonesia Number 7 of 2004, Supplement to the State Gazette of the Republic of Indonesia Number 4357). HAS DECREED :
To enact : FOURTH AMENDMENT TO BANK INDONESIA REGULATION NUMBER 4/9/PBI/2002 CONCERNING OPEN MARKET OPERATIONS
Article I ...

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Article I
Article 4A in Bank Indonesia Regulation Number 4/9/PBI/2002 concerning Open
Market Operations as amended for the last time by Bank Indonesia Regulation Number 7/30/PBI/2005 concerning Third Amendment to Bank Indonesia Regulation Number 4/9/PBI/2002 concerning Open Market Operations shall be amended to read as follows.
Article 4A
(1) Bank Indonesia shall conduct Fine Tune Operations (FTO) at any time as necessary to influence banking liquidity in a short term comprising :
a. Fine Tune Contraction (FTK) transactions by fund placement by Banks in Bank Indonesia or selling of securities of Bank Indonesia to Banks under repurchase agreement. b. Fine Tune Expansion (FTE) transactions by buying of securities of Banks by Bank Indonesia under repurchase agreement. (2) The FTO as referred to in paragraph (1) shall be conducted under the following provisions. a. Transaction tenor shall be 1 (one) day up to 3 (three) months and stated in calendar day/s, counted since 1 (one) day after transaction settlement date up to maturity date. b. Transaction yield may be computed under true discount or simple interest formula as follows.
1) True discount :
360 { } ( ) ( ) FTO discount rate FTO tenor FTO transaction quantity 360 Cash Value

• ×
  ×
  =
  Discount Value = FTO transaction quantity – cash value
  2) Simple interest :
  ( )
  
  
  
  
  
   ×
  × +
  360
  FTO interest FTO tenor 1
  Mature FTO
  Transaction
  Quantity
  c. Transaction ...

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c. Transaction bidding shall be final and may not be cancelled.
d. May not be redeemed before maturity.
Article II
This Bank Indonesia Regulation shall come into force on the date of its enactment. For the public to be informed, it is ordered that this Bank Indonesia Regulation be promulgated in the State Gazette of the Republic of Indonesia. Enacted in Jakarta Dated September 23, 2008 THE GOVERNOR OF BANK INDONESIA,

BOEDIONO
STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 131 OF 2008 Promulgated in Jakarta Dated September 23, 2008 THE MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA, ANDI MATTALATTA ELUCIDATION ...

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ELUCIDATION
TO
BANK INDONESIA REGULATION
NUMBER 10/14 /PBI/2008
CONCERNING
FOURTH AMENDMENT TO
BANK INDONESIA REGULATION NUMBER 4/9/PBI/2002 CONCERNING OPEN MARKET OPERATIONS
ARTICLE BY ARTICLE
Article I
Self-explanatory.
Article II
Self-explanatory.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 4891 DPM