These are Two Cheap Hadging Products
By : Wiyanto Dan Aldo Bella Putra | Monday, August 21 2017 - 20:05 IWST
INDUSTRY.co.id - Jakarta-Bank Indonesia (BI) prepares two hadging instruments for State-Owned Enterprises (SOEs) that are cheaper. Both are call Spread Options and Interes Rate Swaps. This time a new call spread option signed by SOEs with his party.
Deputy Governor of BI Perry Warjiyo said, this hadging still put forward the governance of the directors of state-owned and non-state enterprises. Origin is in accordance with standard operational procedures remain safe for the company.
"Therefore, there are two products that are prepared by SOP, so that the state-owned companies can have the procedure along the lines of course is still in line with the governance, depending on the company, which is obviously a lot of hedging variation," he said in Jakarta on Monday (21/08/2017) .
Perry said that for both hedging products, other names for hadhing cost less than 5%, whereas the average cost of hadhing from forwad and swap products is 5%.
The importance is hadging for SOEs and others to protect the value of corporate debt against the shock of the rupiah against the dollar. To buy a hadging product does not have to be in an unstable economy.
It's good that it is implemented for risk mitigas.
Based on data from the first quarter of 2017, Perry continued, from 2660 companies reporting hadging transactions within three months as much as 88%. Even for hadging period of 6 months approached 90% company.
"Hence, the volume of forex market per day is now US $ 6 billion from the previous US $ 1 billion even just below that, while the volume of foreign currency is 60% derived from derivatives, so hadging has been done and offered before," he explained.