FOREIGN EXCHANGE

1. Intended for individual customers (only valid for FX Tod, FX Tom, FX Spot and Leave Order) and non-individuals (companies/business entities) (valid for all types of FX transactions) both Indonesian citizens (WNI) and Foreigner (WNA)
2. There is no minimum or maximum nominal to be able to transact FX with the Bank.
3. Especially for Leave Orders:
   • the types of transactions allowed are limited to FX Tod, FX Tom and FX Spot
   • a minimum nominal value of USD 10,000 or equivalent to the maximum number of transactions in accordance with the limit of the facilities owned by the Customer.
4. The currencies traded in the Bank are: USD, AUD, CAD, CHF, EUR, GBP, HKD, JPY, NZD, SGD and CNY
5. Before transacting the Customer must:
   • open a saving or current account at the Bank.
   • apply for FX Limit Facility (specifically for FX Tom, FX Spot, FX Forward) to the Bank through signing agreements and other legal documents*
6. FX Transactions involving Rupiah are required to comply with the provisions of Bank Indonesia regarding Foreign Exchange Transactions against Rupiah between Banks and Domestic Parties and Foreign Parties and all amendments thereto.

*The Bank has the authority to provide or not provide this facility and/or product to the Customer in accordance with the Bank's policy

Benefits:

• Customers can fulfill their foreign currency needs with various options.
• Customers can use this financial instrument as a means of hedging for currency needs in the future.

Risks

• Credit Risk
  
  In the event that the Customer conducts FX Transactions, the Customer is exposed to credit risk if the Bank does not fulfill its obligations.

• Liquidity Risk
  
  Liquidity risk occurs when customers are unable to convert from one currency to another without sacrificing profits due to lack of market players or inefficient market conditions.

• Market Risk
  
  Fluctuations in market variables, among others; interest rates and exchange rates that can move in a direction that is not in the Customer's favor.

There are no fees charged to the Customer for the FX transactions above unless the Customer cancels the transaction which has the potential to cause fees in the form of foreign exchange differences

Illustration #1

Date 2 October 2017

Customer:
Call the Bank and ask USD/IDR currency rate

USD/IDR TOD "13.300 - 13.350"
USD/IDR TOM "13.310 - 13.360"
USD/IDR SPOT "13.330 - 13.380"

You  : At what rate does the Bank sell USD for FX TOD transactions to the Bank?
Bank  : 13,350 (You will buy USD and sell IDR on 2 October 2017)

You  : At what rate can you sell USD for FX TOM transactions to the Bank?
Bank  : 13,310 (You will sell USD and buy IDR on October 3, 2017)

You  : At what rate can you sell USD for SPOT FX transactions to the Bank?
Bank  : 13,330 (You will sell USD and buy IDR on October 4, 2017)

You cancel the TOD FX Transaction that has been done with the Bank because until the end of the day your USD 30,000 fund transaction has not arrived at the Bank so the Bank cannot complete the FX transaction. What will you experience?
Bank   : You will be charged a penalty equal to the difference in the USD selling rate that was in effect when the cancellation occurred. Assume the USD Bank buying rate at the time of cancellation is 13,298 then you have to pay a penalty of (13,300-13,298) x USD 30,000 = Rp 60,000.

Ilustrasi 2

The customer has an obligation to pay off the invoice in USD which will be due within 3 months. USD is expected to continue to increase until next year due to the economic policies of the United States government.

The FX Forward Contract allows the Customer to buy USD today at the rate agreed with the Bank for future delivery. So, the Customer can buy USD/IDR FX Forward with a maturity of 3 months to protect himself from the increase in the value of the USD currency.

It should be noted that the FX Forward price is determined by the Spot value and maturity tenor.

For example

If the Customer has purchased FX Forward USD/IDR with a tenor of 3 months at a price of 13,615, then when the FX Forward contract expires, the Customer will buy USD/IDR at a price of 13,615 (even though the current USD/IDR exchange rate is above or below 13,615)