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17 September 2010
On July 2 2010 Bank Indonesia issued the Regulation on Monetary Operations (12/11/PBI/2010). Like Regulation 12/9/PBI/2010, this regulation is part of Bank Indonesia's monetary policy package of June 16 2010 (for further details please see "New prudential principles for banks as agents for foreign financial products").
'Monetary operations' are defined as Bank Indonesia's implementation of monetary policies in the framework of monetary control through open-market operations and standing facilities. The regulation stipulates the mechanics and instruments that the bank uses for this purpose.
Bank Indonesia's open-market operations cover:
Open-market operations may be conducted on a daily basis, with or without an auction. Bank Indonesia's standing facilities basically comprise lending facilities and deposit facilities.
A key element of the regulation is the provision regarding Bank Indonesia certificates, which regulates the administration and trading of such certificates. In addition, the regulation sets out the requirements for persons or parties wishing to participate in Bank Indonesia's open market.
The regulation came into effect on July 7 2010.
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