Taking into account the developments that have taken place since the introduction of the API in early 2004, Bank Indonesia is now readying itself to apply the second scenario in the consolidation program, which in essence is an acceleration of the consolidation program scenario set out in the API.
This proposal, for setting up more than closed-ended private-sector foreign- asset funds, to be licensed by the central bank, appears relevant under certain circumstances, mainly when there is a likelihood of a significant investor interest for such fund. This, however, does not seem realisable, if there is a negative carry that such funds could entail.