BI Hopes Transaction Volume Will Increase Post-CCP Launch

Bank Indonesia (Photo: Antara)

JAKARTA - Bank Indonesia (BI), the Financial Services Authority (OJK), the Indonesia Stock Exchange (IDX) and market players consisting of 8 banks namely Mandiri, BRI, BNI, BCA, CIMB Niaga, Danamon, Maybank, and Permata officially launched the Central Counterparty (CCP) and it is hoped that this new institution will increase the volume of transactions at the Money Market and Valas Market in Indonesia (PUVA).

Bank Indonesia Governor Perry Warjiyo said the presence of CCP is expected to make domestic non-delivery forward (DNDF) transactions increase from 100 million US dollars per day, and in the next 5 years it will be 1 billion US dollars per day.

"Domestic non-delivery forward now is only 100 million US dollars per day per day. In five years, we will increase it by IDR 1 billion per day," he said at the launch of CCP Pura, Monday, September 30.

In addition, Perry hopes that the Repurchase Agreement (REPO) transaction will become IDR 30 trillion in the next 5 years from the initial IDR 14 trillion.

"Five years based on the strategic business plan, we will do it every day. Come on, come on. From Rp. 14 trillion to Rp. 30 trillion," he said.

Perry explained that the increase in DNDF and Repo transactions will occur because various transaction risks with CCP will be smaller than the over-the-count (OTC) scheme carried out by the financial industry so far, so that it will boost transaction activities.

"Because it is centralized by closing out netting, we can minimize the risk between parties. This is a very high credit risk," he said.

To note, BI collaborates with IDX, PT Kliring Indonesia Securities Guarantee (KPEI), and 8 banks namely Mandiri, BRI, BNI, BCA, CIMB Niaga, Danamon, Maybank, and Permata in the formation of this CCP.

Meanwhile, as much as 80 percent of CCP shares will be owned by KPEI and the 8 banks above. While the remaining 20 percent will be owned by BI as a regulator.

"20 percent of us have received approval from the DPR to participate as our regulator. This 20 percent commitment is a motivation for the industry to continue to grow. We have no intention of interfering in participating in business management, as owners of 20% may participate in a commissioner or something, but still as a minority," explained Perry.