REPUBLIKA.CO.ID, JAKARTA - Bank Indonesia (BI) conducts FX Swap auction to maintain liquidity of USD and IDR every Thursday. In the auction, BI sets USD exchange rate based on closing exchange reference rates in Jakarta Interbank Dollar Spot Rate (Jisdor) on the day and premiums.

"Through FX swap auction BI will get additional foreign exchange to be used for intervention. This instrument will increase foreign exchange reserves," Deputy Governor of BI, Perry Warjiyo said on Sunday.

BI offers target of FX swap auction worth 500 million USD with tenor of 1.3 for six month to banks and the volume is subject for evaluation. Point of premium FX swap auction depends on exchange rates and interest rates monetary operations. 

Second goal of FX swap auction is to provide investors with instrument to protect their investment from exchange rate fluctuations. Third goal, FX swap market is to deepen foreign exchange and stabilize financial system monetary in Indonesia. It's expected to hold pressure of weakening of IDR against USD.

In the first auction this week, Warjiyo said BI had received double demand, reflected high interest of market participants. Total bids reached 1.240 billion USD, while FX swap action that is won reached 600 million USD. 

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