Central bank's Miranda meets Singaporean bankers
Central bank's Miranda meets Singaporean bankers
SINGAPORE (Dow Jones): Bank Indonesia Deputy Governor Miranda Gultom met top bankers in Singapore Monday to discuss Jakarta's recent curbs on offshore trading of the rupiah.
The restrictions on offshore rupiah trading led to the creation of a non-deliverable forward market for the Indonesian currency, which is beyond Bank Indonesia's jurisdiction and is believed to have irked Jakarta.
The Monetary Authority of Singapore Tuesday confirmed to Dow Jones Newswires a meeting, on Monday, between Miranda and MAS' Managing Director-designate Tharman Shanmugaratnam, but it didn't give details.
"MAS understands there was also a meeting yesterday (Monday) arranged by the Singapore Foreign Exchange Market Committee at a local hotel for Bank Indonesia officials to meet banks in Singapore," the MAS said.
Last week, a Bank Indonesia official told Dow Jones Newswires that officials from the Indonesian central bank, led by Miranda, would meet Singapore bankers to explain its recent rules which ban the transfer of the rupiah offshore.
Bank Indonesia's deputy director for foreign exchange management, Dibyo Raharjo, said the meeting with Singapore bankers was arranged at the latter's request.
In January, Bank Indonesia issued new foreign exchange regulations which banned rupiah transfers offshore and cut the ceiling on rupiah forward contracts with nonresidents to $3 million from $5 million for each bank. The rules were aimed at reducing volatility in the rupiah.
The regulations dried up rupiah trading offshore and so far has been successful in stabilizing the rupiah in the spot market despite domestic political instability.
Banks in Singapore started rupiah NDF trading last week as such transactions are settled in dollars and don't require rupiah transfers.
There were concerns that NDF trading would increase the volatility of the rupiah. However, thus far, the rupiah hasn't been affected as NDF trading in Singapore is virtually nonexistent, dealers said.