Inflation Control and Financial Facilities Strategy
Bank Indonesia Policy Mix: April 2020
Mitigating the risk of COVID-19 transmission
B BANK INDONESIA
BANK SENTRAL REPUBLIK INDONESIA
Bank Indonesia Issued Implementing Provisions for Auction of Government Debt Securities (SUN) and/or
Government Islamic Securities (SBSN) in the Primary Market
Bank Indonesia issued Board Member of Governors Regulation No. 22/5/PADG/2020 on Auction of Government Debt Securities
and/or Government Islamic Securities in the Primary Market to Maintain State Financial Management Sustainability as
Implementation of Government Regulation in Lieu of Law Number 1 of 2020 on State Financial Policy and Stability of Financial
Systems for the Management of Corona Virus Disease 2019 (Covid-19) and/or Encounter the Threat to National Economy
and/or Stability of Financial Systems. The regulation starts to take effect on 20 April 2020.
The regulation serves as a follow-up to Government Regulation in Lieu of Law Number 1 of 2020, granting authority to Bank
Indonesia among others to purchase Government Debt Securities (SUN) and/or Government Islamic Securities (SBSN) in the
primary market. It is necessary as a funding source for the government to recover the national economy including maintaining
state financial management sustainability including SUN and/or SBSN issued in response to COVID-19 pandemic. Purchase of
SUN and/or SBSN in the primary market is based on principle that Bank Indonesia is a last resort if the market capacity is
unable to purchase them and/or result in high yield increase. Further, this regulation specifies the following:
1) Bank Indonesia holds auction of SUN and/or SBSN and auction of additional SUN and/or SBSN for long-term SUN and/or
SBSN in the primary market as a follow-up to the implementation of Government Regulation in Lieu of Law Number 1 of
2020.
2) Provisions for offer quote and participants of auction of SUN and/or SBSN and auction of additional SUN and/or SBSN refer
to the applicable Finance Minister Regulation on auction of SUN and/or SBSN in the domestic primary market.
3) Bank Indonesia may quote an offer to purchase long-term SUN and/or SBSN in auction of SUN and/or SBSN and auction of
additional SUN and/or SBSN in the following manners: a. directly without using the main dealer and/or SBSN main dealer;
b. non-competitive bid.
4) Implementation of auction of SUN and/or SBSN and auction of additional SUN and/or SBSN refer to the applicable Bank
Indonesia provisions for auction of Government securities in the primary market provided that they are not in contravention
of this regulation.
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