Indonesia central bank allows banks to sell FX call spread options

[JAKARTA] Indonesia's central bank on Thursday issued a regulation allowing banks to sell call spread option contracts of foreign exchange transaction for hedging purposes.

Only banks with capital of at least 5 trillion rupiah (S$520 million) can offer the call spread product and such contract must have an underlying transaction, such as trade, investment or loans in currencies other than the rupiah, the regulation said.

Bank Indonesia has previously said it will issue several new regulations allowing banks to sell new financial products, including structured foreign exchange hedging ones such as call spread options.

REUTERS