Inflation Control and Financial Facilities Strategy
Bank Indonesia Policy Mix: March 2020
Mitigating the risk of COVID-19 transmission
B BANK INDONESIA
BANK SENTRAL REPUBLIK INDONESIA
Bank Indonesia on the Board of Governors Meeting 18th and 19th March 2020 has reinforced its policy mix towards
mitigating the risk of COVID-19 transmission, while maintaining money market and financial system stability and
catalyzing economic growth momentum through the following policy measures:
1) Strengthening the intensity of triple intervention policy to maintain rupiah exchange rate stability in line with the currency's
fundamental value and market mechanisms, including the spot and DNDF markets as well as purchasing SBN in the secondary
market.
2) Extending the SBN repo tenor to 12 months and providing daily auctions to loosen rupiah liquidity in the banking industry, effective
from 20th March 2020.
3) Increasing the frequency of FX swap auctions for 1, 3, 6 and 12-month tenors from three times per week to daily auctions in order
to ensure adequate liquidity, effective from 19th March 2020.
4) Strengthening foreign currency term deposit instruments in order to enhance foreign currency liquidity management in the domestic
market, while encouraging the banks to utilize the foreign currency reserve requirements lowered by Bank Indonesia for domestic
purposes.
5) Expediting the enforcement of domestic vostro rupiah accounts for foreign investors as underlying transactions for Domestic Non-
Deliverable Forwards (DNDF), thus increasing hedging alternatives against rupiah holdings in Indonesia, which has been brought
forward from 1st April 2020 to no later than 23rd March 2020.
6) Expanding the incentive of a 50bps daily rupiah reserve requirement beyond banks that are engaged in export-import financing to
include the financing of MSMEs and other priority sectors, effective from 1st April 2020.
7) Strengthening payment system policy to support COVID-19 mitigation efforts by:
providing hygienic currency fit for circulation, alternative cash and backup services, and urging the public to prioritize non-cash
payment transactions;
encouraging the use of non-cash payment channels by reducing the cost of the National Clearing System (SKNBI) from the
banking industry to Bank Indonesia from IDR600 to IDR1 and from customers to the banking industry from a maximum of
IDR3,500 to IDR2,900, effective from 1st April 2020 until 31st December 2020; and
supporting non-cash disbursements for government programs, such as the Family Hope Program (PKH) and Noncash Food
Assistance Program (BPNT), Pre-Employment Card and College Smart Indonesia Card.
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