OCTOBERASIA BUSINESS OUTLOOK9NEWSROOMINDONESIA TO IMPROVE LIQUIDITY FOR BANKS VIA LATEST FINANCE BODYOil prices rose slightly on Monday amid growing concerns over potential supply disruptions in the Middle East following intensified attacks by Israel on Iranian-backed forces. Brent crude futures for November saw a modest increase of 16 cents (0.22 percent) to $72.14 per barrel, while the more active December contract gained 10 cents (0.14 percent) to $71.64 per barrel. U.S. West Texas Intermediate (WTI) crude also edged up by 8 cents (0.12 percent) to $68.26 per barrel.Despite recent declines last week, where Brent dropped by 3 percent and WTI by 5 percent, Monday's gains were driven by escalating tensions in the Middle East. Concerns have risen over the possibility of Iran, a major OPEC producer, being drawn further into the conflict. ANZ Research noted that these tensions increase the risk of potential supply disruptions from Iran.Over the weekend, Israel expanded its military operations, targeting Houthi positions in Yemen and continuing its confrontation with Hezbollah after the killing of its leader, Sayyed Hassan Nasrallah, in Lebanon. The U.S. also stepped up its military presence in the region, with Defence Secretary Lloyd Austin stating that Washington would take necessary measures to defend its personnel if targeted by Iran or its allies.Later in the day, markets are expected to focus on remarks from Federal Reserve Chair Jerome Powell, which could provide insights into the central bank's stance on monetary policy easing. However, downward pressure on oil prices remains as OPEC+ plans to raise output by 180,000 barrels per day in December, along with the resumption of oil exports from Libya. Indonesia is set to launch a central counterparty clearing house (CCP) for foreign exchange and money market transactions next week, aiming to deepen its capital markets. This initiative, led by Bank Indonesia (BI), seeks to integrate the country's fragmented money and foreign exchange markets, improving liquidity for banks and mitigating default risks.The CCP will enhance transaction efficiency, with an anticipated increase in transaction volumes, according to Donny Hutabarat, head of BI's Financial Market Development Department. Currently, market pricing is skewed as larger banks mainly transact with other large banks, creating inefficiencies.The first instrument to be facilitated by the CCP will be Domestic Non-Deliverable Forwards (DNDF), with additional instruments like repo, interest rate swaps, and overnight indexed swaps to be introduced over the next five years. Non-bank entities are expected to participate from 2026 onward.The CCP will be operated by the Indonesia Stock Market Clearing House, BI, and eight major banks: Bank Central Asia, Bank Rakyat Indonesia, Bank Mandiri, Bank Negara Indonesia, Permata Bank, Bank Danamon, CIMB Niaga, and Maybank. These shareholders will contribute to guarantee funds designed to prevent default. BI, while holding shares, will function as a regulator and supervisor alongside Indonesia's financial services authority. OIL PRICES WITNESS DISRUPTIONS AS MIDDLE-EAST CONFLICTS ESCALATE
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