Bloomberg announced today that it has launched a bespoke reverse repo analysis and trading platform for Indonesia’s financial market participants, in a move that will help broaden and deepen the money market in the country. Repurchase agreements, or repos, are well established sources of money market funding in the global financial market, especially in Europe where the market size is estimated at EUR5.7 trillion in December 2016[1]. Among other key banks, Bank Negara Indonesia was one of the first banks that traded on Bloomberg’s repo platform.
Partnering with the Money Market Working Group (MMWG) in the Indonesia Foreign Exchange Market Committee (IFEMC), Bloomberg worked closely with over 20 banks to develop a solution that fits within the regulatory framework of Indonesia’s money market. The IFEMC aims to foster the development of an efficient and stable financial market in Indonesia.
Mr. Martin Mulwanto, IFEMC Head of MMWG and Managing Director at PT. Bank Mega said, “With Bloomberg’s help, we are making strides in creating a secure, transparent and vibrant debt market that will further broaden and develop our financial market. Bloomberg’s world-class technological capabilities and in-depth localized knowledge of the Indonesia repo market meant that they were able to customize the platform according to our specific needs.”
Bloomberg’s repo platform provides repo counterparties a standardized calculation and communication platform with complete transparency into the collateralization details. It also incorporates a swift and efficient trade confirmation system that streamlines the workflow between counterparties, thus minimizing errors that could occur.
In recent years, Bank Indonesia has placed considerable efforts to deepen the financial market including introducing cross-currency swaps, expanding the scope for foreign funds’ participation and mandating companies to hedge their currency exposure. In line with international best practices,[2] Bank Indonesia chose the seven-day reverse repo rate as its policy benchmark.
Andrea Mosconi, Head of ASEAN for Bloomberg said, “We are delighted to be the technology solution for Indonesia’s repo market, partnering with IFEMC and the sell-side community to provide a robust platform for the market to participate in the repo market. Indonesia is an important market in the ASEAN region for Bloomberg and we will continue to seek ways to play a key role in the development of its financial market.”
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