Indonesia plans to launch a central counterparty clearing house for foreign exchange and interest rate derivative transactions next year, in which Bank Indonesia (BI) will hold a stake, the central bank’s spokesperson said on Monday (Nov 13).

Parliament’s financial committee approved BI’s planned 9.8 per cent stake, worth about 40 billion rupiah (S$46 million), in the central counterparty clearing house (CCP), spokesperson Erwin Haryono told reporters.

The Indonesia Stock Exchange (IDX) will hold a 51 per cent stake worth 208.16 billion rupiah in the CCP, and eight of Indonesia’s biggest banks will hold the remainder, according to documents BI presented to parliament.

BI issued rules on CCPs in 2019 in response to a G20 resolution to control derivative risks after the 2008 global financial crisis.

Monetary policymakers have also said CCPs should help bridge trust between big and small banks in Indonesia, reducing liquidity gaps by lessening default and other market risks.

BI’s stake in the CCP is needed at the first stage “considering that it takes time to achieve economies of scale with the current market conditions” and is in line with global practices, according to its documents.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

“I hope even though BI’s stake in the CCP is minimum, BI can still be ... a game changer,” Misbakhun, a member of parliament’s financial committee, told reporters. REUTERS