New Countercyclical Parameter: A Leeway for Banks' Short-Term Offshore Funding

In 2019, Bank Indonesia (“ BI ”) issued Regulation No. 21/1/PBI/2019 on Offshore Bank Loans and Other Bank Liabilities in Foreign Currencies (“ Regulation 21/2019 ”). As its title suggests, Regulation 21/2019 outlines the applicable mechanism through which conventional and sharia commercial banks (“ Banks ”) can secure offshore loans (Utang Luar Negeri– “ ULN ”) and other forms of liabilities in foreign currencies. [1] In this regard, it should be noted that various provisions that address Banks’ ULN and relevant liabilities, as addressed under Regulation 21/2019, were previously summarized in the following edition of Indonesian Legal Brief (“ ILB ”):“ BI Redefines Implementation of Prudential Principles for Offshore Bank Loans and Other Liabilities ”.