Investor Presentaiton
Loose Liquidity Persist, In Line with Strengthened Synergy
Between Monetary and Fiscal Policy
PRINCIPLES OF FUNDING AND BURDEN SHARING
PRUDENT
Maintaining the credibility of Monetary Policy in the effort to
Maintain Economic Stability
MARKET
MECHANISM
TRADABLE &
MARKETABLE
MEASURED
LAST RESORT
SUN/SBSN tradable
maintaining inflation
in the target range
One-off Policy
in 2020
GOVERN
Prioritize good governance
SUSTAINABLE
Bl as the back-stop
for Non-public Goods
scheme
Bank Indonesia has injected liquidity through quantitative
easing to the banking industry totaling IDR 101.10 trillion in
2021 (as of 19th July 2021). Furthermore, Bank Indonesia
continues to purchase SBN in the primary market as part of
policy synergy between Bank Indonesia and the Government
to fund the 2021 State Revenue and Expenditure Budget
(APBN). As of 19th July 2021, Bank Indonesia has
purchased SBN in the primary market totalling IDR 124.13
trillion, consisting of IDR 48.67 trillion through primary
auction and IDR 75.46 trillion through Greenshoe Options
(GSO)
Expansive monetary policy supports loose economic liquidity
conditions, as reflected in the high ratio of liquid assets to
deposits at 32.95% and deposit growth of 11.28% (yoy)
Liquidity in the economy has also increased, as indicated
by narrow (M1) and broad (M2) money supply, which grew
17.0% (yoy) and 11.4% (yoy) in June 2021. The main
drivers of money supply growth are expansive policies by
the authorities and credit growth, which has moved into
positive territory
Moving ahead, increasing lending activity is expected to
expand the contribution of liquidity in terms of driving
economic growth through a higher velocity of money in the
economy
Source: Bank Indonesia
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