In a move that is aimed at boosting greater connectivity coupled with market transparency within the foreign-exchange community, Bank Indonesia has announced that they will integrate Bloomberg FXGO, into SISMONTAVAR. SISMONTAVAR, which is short for “Sistem Monitoring Transaksi Valuta Asing Terhadap Rupiah”, is Bank Indonesia’s real-time trade monitoring system that allows tracking of foreign currencies transactional data against the Indonesia Rupiah (IDR) by Bank Indonesia.
With this direct connectivity, IDR transactions executed on Bloomberg FXGO will be received by Bank Indonesia. Banks and securities firms in Indonesia will also benefit from the integration of Bloomberg’s commission free, multi-bank FX trading platform into SISMONTAVAR. This is because it will help them seamlessly conduct FX transactions on their Bloomberg Professional service. This includes FX transactions such as pre-trade and trade execution (spot, forward, swap, NDF, deposit and option transactions) as well as post- trade reporting to the central bank.
The ease of executing spot, NDF (non- deliverable forward), swap, option and outright transactions from pre-trade, trade-execution to post- trade processes on a single trading platform offers several unique benefits to buy-side and sell-side users on FXGO. This will contribute to a marked improvement on the accuracy of the IDR value against foreign currencies and ultimately to market transparency.
Bloomberg is the world’s leading provider of financial data & news. The company is reaping the benefit of its gradual expansion in the Southeast Asia’s largest economy over the past 3 years. This has seen Bloomberg’s business grow by double-digits even as more banks, corporate treasuries and mutual funds sign up for its dealing platform. According to company data, Last year, Bloomberg’s business in Indonesia grew by over 12%, with an average of double digit-growth in the past 10 years.
And as Indonesia’s economy continues to expand, so does the market for financial data, news and analysis on the country and from Indonesians. Last year, the country’s mutual fund-assets that was under management grew by 19% to Rp 228-Trillion ($17.5Billion). The data available on SISMONTAVAR is what represents the weighted average of USD/IDR spot-transactions traded in the interbank market. It is from this data that the JISDOR (Jakarta Interbank Spot Dollar Rate) is derived. This reference rate aids the central bank in coming up with responsive policies as it reflects the market demand and supply. FX market participants use it extensively to determine the value of their FX-trade; and portfolio or asset. Businesses use it to manage their balance sheets.
Global Head of FX & Commodities Electronic Trading, Tod Van Name was quoted as saying that this development marks an important milestone at atime when the global foreign-exchange market is seeking for new ways to boost efficiency and transparency. He added that the direct connectivity between SISMONTAVAR and Bloomberg FXGO will allow Bloomberg’s clients to achieve significantly more efficient and faster workflow when sourcing and when settling their foreign-exchange needs, even as they support the requirements of Bank Indonesia.
Bloomberg FXGO is one of a variety of offerings of Bloomberg Professional service provided on a subscription basis. Also known as the terminal, Bloomberg Professional service was founded in 1982 and it provides financial data to businesses as well as financial professionals through its offerings. FXGO has a robust foreign-exchange community and it records double digit annual growth-rates across multiple users, volumes and transaction value.
The Bank for International Settlements conducted the 10th-Triennial Central Bank Survey. According to the survey, trading in FX markets rose 61% from 6 years-ago to an average of US$5.3-trillion each day in April 2013. At US$2-trillion per day, foreign exchange spot trading was amongst the most-actively traded instruments. In 2013, the FX market turnover in Indonesia stood at US$5 billion.