The news comes as Bank Indonesia, the country’s central bank, fights to support the rupiah as the global economic outlook deteriorates. Fears that investors would pull out the hot money that has flown into relatively open Indonesia in recent years have risen as the eurozone debt crisis escalates and worries over a slowdown in China and India increase.
Bank Indonesia noted the worsening global economic conditions and its efforts to support the rupiah after its policy meeting last week.
The central bank said it would encourage more supply of foreign currency “to manage depreciation pressure triggered by worsening crisis in the euro area and negative sentiment in the global market”, so that the rupiah moved in tandem with other Asian currencies and the country’s economic fundamentals.
Megain Widjaja, chief executive of ICDX, says the launch of the new FX contracts will support the central bank’s policy to gather back foreign exchange reserves from export activity.
“Through the introduction of the currency contracts, Indonesian investors and institutions have more economical reason to deposit their foreign reserves back in Indonesia, instead of somewhere else,” he says.
“The vast offering on currency pairs will allow market participants to actively engage in currency trading, managing their foreign reserves exposures against other currencies and, most importantly, attract their foreign reserves back in Indonesia.”