Summary :

1. The amendment to Bank Indonesia Regulation is made in the context of the enhancement of domestic economic resilience through liquidity management and augmentation of monetary operation instruments in order to support the development of domestic foreign currency markets and the achievement of operational targets of monetary policy.
2. The amendment to this Bank Indonesia Regulation covers:
   1. the inclusion of liquidity management in foreign currency markets as a means of supporting the achievement of operational targets of monetary policy, in addition to liquidity absorption and/or injection in rupiah money market.
   2. the improvement of the types of Open Market Operation activities by adding term deposit in Bank Indonesia in foreign currency, thus the scope of OMO activities is as follows:
      1. issuance of Bank Indonesia Certificate (SBI);
      2. transactions on repurchase agreement (repo) and reverse repo of securities;
      3. transaction on outright purchase and sale of securities;
      4. term deposit in Bank Indonesia in rupiah;
      5. term deposit in Bank Indonesia in foreign currency;
      6. sale and purchase of foreign currency against rupiah; and
      7. other transactions, both in rupiah money market and foreign currency money market.
   3. the addition of regulation in relation to term deposit in foreign currency including, among other things, transaction features and mechanism for term deposit in foreign currency as follows:
      1. The transaction of Term Deposit in foreign currency may be disbursed prior to maturity (early redemption) and converted into FX Swap transaction.
      2. The transaction of Term Deposit in foreign currency may serve as deductible for calculation of Net Open Position under certain requirements.
      3. Monetary Operation participants shall be required to report the total Net Open Position on a daily basis at the end of business days after calculating term deposit in foreign currency as deductible. In the event that the participants fail to make such reporting, Monetary Operation participants shall not use the term deposit as deductible for Net Open Position.
      4. In the event that Monetary Operation participants fail to fulfill the obligations to settle the transaction of term deposit in foreign currency, the said transaction is declared to be cancelled. For such transaction cancellation, Monetary Operation participants shall be subject to sanctions.
3. This Bank Indonesia Regulation shall come into effect on June 8, 2012