Posted on 07/01/2013 9:11:38 PM PDT by TexGrill
The Indonesian central bank, Bank Indonesia (BI), hailed its Singaporean counterpart for punishing traders found guilty of manipulating rupiah quotes.
The Monetary Authority of Singapore (MAS), has ordered banks proven guilty of collusion to fire the employees involved, a form of punishment, according to one senior BI official that was considered “quite ruthless”.
“Those people [the punished employees] were treated as if they were criminals [...] they will find it difficult to get another job in Singapore,” BI executive director for reserves and exchange management, Treesna Wilda Suparyono, said on Monday, adding that the punishment proved MAS’ awareness of BI’s concerns.
Internal reviews by banks in Singapore have found evidence that traders from several banks colluded to deliberately weaken the rupiah by manipulating their quotes for non-deliverable forwards (NDF).
The NDF is the rupiah quote determining the currency’s future value within a one-month timeframe and is used by investors to hedge the risks associated with currencies that are illiquid and highly volatile, such as the rupiah.
The gap between rupiah rates in Jakarta and NDF in Singapore widened recently, with NDF touching 10,533 per US dollar on June 20, its weakest level in three years.
(Excerpt) Read more at thejakartapost.com ...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.