The central bank of Indonesia, Bank Indonesia, has issued a new rule pertaining to Islamic hedging through its regulation No 18/2/PBI/2016 ‘Hedging Principles based on Shariah Principles’. This is basically a follow-up to the Fatwa (Islamic ruling) issued by the Shariah National Board of the Indonesian Islamic Scholar Council (DSN-MUI) on the same subject in 2015. The main objective of this new rule is to help Islamic banks and Islamic business units of conventional banks reduce currency risk in doing their businesses.
