2022 State Budget: Fiscal Policy and Structural Reform
Principles of Domestic Non Deliverable Forward (DNDF) Transaction
1.
2.
3.
Purposes
To support the effort of stabilizing
the Rupiah exchange rate through
the additional of alternative
hedging instruments
To support the development and
deepening of the domestic
financial market
To increase the confidence of
exporters, importers, and investors
in conducting economic and
investment activities through the
flexibility of hedging transactions
against Rupiah currency risk
General Provisions
Domestic Non-Deliverable Forward Transaction (DNDF Transaction)
Plain vanilla derivative transaction of foreign exchange against rupiah in the form of
forward transaction with fixing mechanism in the domestic market
Forward Transactions
Forward Transactions are sell/purchase foreign currencies against rupiah whereas the
delivery of funds shall be performed in more than 2 days after the transaction date
Fixing Mechanism
Transaction settlement mechanism without full movement of funds by calculating the
difference between rate on the transaction date and reference rate in JISDOR on a
specified future time agreed in the contract (fixing date)
Other Definitions
The definition of derivative transaction of foreign exchange against rupiah, Forward
Transaction, Spot Transaction, Customers, Foreign Party is referring to Bank Indonesia
regulations regarding foreign exchange transaction against rupiah
Source: Bank Indonesia
161View entire presentation