TEMPO.CO, Jakarta - Bank Indonesia (BI) is drafting a regulation on the money market industry. The central bank expects the BI rule to be completed by the end of August this year.
BI Governor Agus DW Martowardojo said the rule is needed to manage the money market, the rupiah market, and the foreign exchange (forex) market.
Once the rule is finalized and implemented, banks will be the major players in money markets, and will be allowed to transact with the central banks. The regulation is expected to improve risk management in dealing transactions.
The rule will also affirm BI's authority in regulating money market and forex market transactions.
"The money market allows instruments that are issued by commercial banks and the central bank. It also allow [the trading of] instruments released by non-bank corporations," he said in Jakarta Monday, May 30, Bisnis Indonesia reported.
Corporates are expected to issue notes like commercial papers, medium term notes (MTN), negotiable certificate of deposits (NCD), and bonds.
The draft rule has been approved by all members of BI's board of governors and is being finalized.
