ID :
43453
Fri, 01/30/2009 - 22:22
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https://www.oananews.org//node/43453
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BI: 15 BANKS INVOLVED IN SPECULATIVE HEDGING TRANSACTIONS
Jakarta, Jan 30 (ANTARA) - Bank Indonesia (BI) Deputy Governor Budi Mulia said 15 banks in the country have proven to be involved in speculative hedging transactions worth between US$3.5 billion and US$4.0 billion.
"Some 15 banks were involved but the transactions were worth only around US$3.5 billion or not more than US$4.0 billion," he said.
The transactions were still within tolerable limits. "In total the hedging transactions could reach US$60 to US$70 billion," he said.
He explained the speculative hedging transactions were made to gain enhanced returns but derivative transactions of speculative nature were banned under BI Regulation No 10/37 issued in December 2008.
The BI regulation also contained clauses on the settlement of speculative transactions that had already been made. Such transactions had to be settled before they matured by converting them into credits or by restructuring them, he said.
Mulia said it was hoped the settlement of the recently discovered speculative transactions would not create pressure on the rupiah. "Imagine if we settled them all at once (US$4 billion). It could cause pressures on the rupiah. Therefore, we have chosen a way that will not exert pressure on the rupiah," he said.
He said he hoped the problem could be settled in the first semester of this year. The process would take some time because the transactions would mature at different times, some in May, others in June and other months, Mulia said.
"Some 15 banks were involved but the transactions were worth only around US$3.5 billion or not more than US$4.0 billion," he said.
The transactions were still within tolerable limits. "In total the hedging transactions could reach US$60 to US$70 billion," he said.
He explained the speculative hedging transactions were made to gain enhanced returns but derivative transactions of speculative nature were banned under BI Regulation No 10/37 issued in December 2008.
The BI regulation also contained clauses on the settlement of speculative transactions that had already been made. Such transactions had to be settled before they matured by converting them into credits or by restructuring them, he said.
Mulia said it was hoped the settlement of the recently discovered speculative transactions would not create pressure on the rupiah. "Imagine if we settled them all at once (US$4 billion). It could cause pressures on the rupiah. Therefore, we have chosen a way that will not exert pressure on the rupiah," he said.
He said he hoped the problem could be settled in the first semester of this year. The process would take some time because the transactions would mature at different times, some in May, others in June and other months, Mulia said.
