PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
37. FINANCIAL RISK MANAGEMENT continued
2. Financial risk management continued a. Foreign exchange risk continued
Increasing risks of foreign currency exchange rates on the obligations of the Group are expected to be offset by the effects of the exchange rates on time deposits and receivables in
foreign currencies that are equal to at least 25 of the outstanding current foreign currency liabilities.
The following table presents the Group’s financial assets and financial liabilities exposure to foreign currency risk:
2016 2015
U.S. dollar in billions
Japanese yen
in billions U.S. dollar
in billions Japanese
yen in billions
Financial assets 0.32
0.01 0.63
0.01 Financial liabilities
0.27 6.17
0.46 6.95
Net exposure 0.05
6.16 0.17
6.94
Sensitivity analysis
A strengthening of the U.S.dollar and Japanese yen, as indicated below, against the Rupiah at December 31, 2016 would have decreased equity and profit or loss by the amounts shown
below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all
other variables in particular interest rates, remain constant.
Equityprofit loss
December 31, 2016
U.S. dollar 1 strengthening 7
Japanese yen 5 strengthening 35
A weakening of the U.S.dollar and Japanese yen against the rupiah at December 31, 2016 would have had an equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant. b. Market price risk
The Group is exposed to changes in debt and equity market prices related to available-for- sale investments carried at fair value. Gains and losses arising from changes in the fair value
of available-for-sale investments are recognized in equity. The performance of the Group’s available-for-sale investments is monitored periodically,
together with a regular assessment of their relevance to the Group’s long-term strategic plans. As of December 31, 2016, management considered the price risk for the Group’s available-
for-sale investments to be immaterial in terms of the possible impact on profit or loss and total equity from a reasonably possible change in fair value.
c. Interest rate risk Interest rate fluctuation is monitored to minimize any negative impact to financial performance.
Borrowings at variable interest rates expose the Group to interest rate risk Notes 15 and 16. To measure market risk pertaining to fluctuations in interest rates, the Groupprimarily uses
interest margin and maturity profile of the financial assets and liabilities based on changing schedule of the interest rate.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
37. FINANCIAL RISK MANAGEMENT continued
