JAKARTA - Bank Indonesia (BI) has issued foreign exchange securities instruments of Bank Indonesia (SVBI) and foreign currency sukuk Bank Indonesia (SUVBI) to strengthen policies in maintaining the stability of the rupiah exchange rate and supporting the development of the money market.
The mechanisms of the two instruments are regulated in Bank Indonesia Regulation Number 13 concerning the Second Amendment to Bank Indonesia Regulation Number 22/14/PBI/2020 concerning Monetary Operations. This provision is effective on November 16, 2023.
Executive Director of the Communication Department of Bank Indonesia, Erwin Haryono, said the issuance of SVBI and SUVBI was carried out to manage foreign exchange liquidity to support the stability of the rupiah exchange rate.
"The two instruments are in line with the market (pro market) mechanism to support the deepening of the money market in foreign currencies to support the effectiveness of monetary policy, financial system stability, and economic financing synergy," he explained in his official statement Tuesday, November 21.
In addition, SVBI and SUVBI expand population access and are not residents of instruments issued by Bank Indonesia that can support efforts to attract incoming portfolio investment flows (portfolio inflows) which ultimately strengthens the stability of the rupiah exchange rate.
In detail, the characteristics of SVBI are as follows:
- Using an underlying asset in the form of securities in foreign currency;- The shortest time of 1 (one) month and a maximum of 12 (twelve) months stated in the number of calendar days, calculated since 1 (one) calendar day after the date of completion of the transaction up to the date of time infall; - Published in foreign currency; - Published and traded with a discontotic system; - Can be moved; and- Can be owned by residents or non-residents in the secondary market.
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The SUVBI has the following characteristics:
- Using an underlying asset in the form of a global sukuk belonging to Bank Indonesia;- The shortest time of 1 (one) month and a maximum of 12 (twelve) months stated in the number of calendar days, calculated since 1 (one) calendar day after the date of completion of the transaction up to the date of time infall; - Published in foreign currency; - Issued without warkat; - Can only be purchased by Sharia Commercial Banks and Sharia Business Units in the primary market; - Can be transferred to the secondary market; - And can be owned by residents or non-residents in the secondary market.
Further technical arrangements related to SVBI and SUVBI are explained in the Governor's Board Member Regulation Number 15 and 16 of 2023? concerning the Fifth Amendment to the Governor's Board Member Regulation Number 22/22/PADG/2020 concerning Open Market Operations Instruments.
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