Jakarta and Manila sign repo pact<\/p>\n
JAKARTA (JP): The central banks of Indonesia and the
\nPhilippines signed a memorandum of understanding yesterday,
\nestablishing a repurchasing agreement line which will provide an
\nalternative source of liquidity for both parties.<\/p>\n
The memorandum was signed by Bank Indonesia Governor
\nSoedradjad Djiwandono and Gabriel C. Singson, Governor of the
\nPhilippine central bank.<\/p>\n
A statement from Bank Indonesia said the agreement with the
\nPhilippine central bank was the sixth similar accord concluded
\nwith central banks in the Asia-Pacific region.<\/p>\n
Bank Indonesia signed repo agreements with the central banks
\nof Malaysia, Singapore, Hong Kong, Thailand and Australia last
\nyear.<\/p>\n
The repo agreements seem to have been prompted by the massive
\nspeculative attacks on the currencies of Indonesia, Thailand,
\nMalaysia and Hong Kong early last year which were set off by the
\nfinancial crisis in Mexico late in December, 1994.<\/p>\n
The agreements increase the ability of the central banks to
\nintervene in foreign exchange markets by giving them additional
\nsources of liquidity to draw on to curb speculative attacks on
\ntheir own currencies.<\/p>\n
Bank Indonesia reiterated the importance of macro-economic
\nstability for coping with the impact of big capital flows.<\/p>\n
\"We have also maintained an adequate amount of foreign
\nreserves, including a standby loan, to meet our international
\nobligations,\" the central bank said.<\/p>\n
But given the accelerated globalization process of the economy
\nand the financial markets, the management of economic and
\ncurrency stability has now become more complicated, it added.<\/p>\n
The repo agreements thus serve as an additional source of
\nliquidity which can be drawn on whenever required, Bank Indonesia
\nsaid. (vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jakarta-and-manila-sign-repo-pact-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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