New SGD-IDR framework to give corporates better FX hedging: DBS

It provides corporate with better market access, said DBS' head of foreign exchange.

The new framework for settling bilateral transactions between Indonesia and Singapore provides corporate expands market access and improves risk hedging, said DBS.

On 31 August, the Monetary Authority of Singapore (MAS) and Bank Indonesia (BI) announced a framework that enables appointed cross currency dealers (ACCDs) to facilitate the settlement of select transactions, such as current account transactions, direct investment, and cross-border payments in the Indonesian rupiah and Singapore dollar.

DBS, OCBC, and UOB have been appointed ACCD banks in the Singapore side.

Li Zhen, head of foreign exchange, global financial markets at DBS, said that the bank is pleased to expand its capabilities to the SGD-IDR currency pair.

“This provides corporates with better market access and more options when hedging foreign exchange risk,” Li said in a statement.

DBS had been an ACCD for CNH-IDR transactions for a few years, Li said.

“As supply chains and trade flows realign towards the region, we see a growing trend of direct Asian quotes as corporates look to better manage trade, liquidity and foreign exchange risks,” Li said.