Inflation Control and Financial Facilities Strategy
Bank Indonesia Policy Mix: April 2020
B BANK INDONESIA
BANK SENTRAL REPUBLIK INDONESIA
The BI Board of Governors agreed on 13th and 14th April 2020 to hold the BI 7-Day Reverse Repo
Rate at 4.50%, while also maintaining the Deposit Facility (DF) and Lending Facility (LF) rates at
3.75% and 5.25%.
Rupiah Reserve Requirement Lowered by 200 bps
1) To stabilize and strengthen rupiah exchange rates, Bank Indonesia has strengthened the intensity of triple intervention policy
through the spot and Domestic Non-Deliverable Forward (DNDF) markets, as well as purchasing SBN in the secondary market.
2) To support national economic recovery efforts from the deleterious COVID-19 impact, Bank Indonesia will increase monetary easing
through quantitative easing as follows:
a. Expand monetary operations by providing banks and the corporates a term-repo mechanism with SUN/SBSN underlying
transactions of tenors up to one year.
b. Lower the rupiah reserve requirement ratios by 200bps for conventional commercial banks and by 50bps for Islamic banks/Islamic
business units, effective from 1st May 2020.
c. Relax the additional demand deposit obligations to meet the Macroprudential Intermediation Ratio (MIR) for conventional
commercial banks as well as Islamic banks/Islamic business units for a period of one year, effective from 1st May 2020.
3) To strengthen liquidity management in the banking industry and in relation to the lower rupiah requirements, Bank Indonesia has
raised the Macroprudential Liquidity Buffer (MLB) by 200bps for conventional commercial banks and by 50bps for Islamic
banks/Islamic business units, effective from 1st May 2020. The banking industry is required to meet the additional MLB through
purchases of government issued SUN/SBSN in the primary market.
4) To increase the uptake of non-cash payment instruments in order to mitigate the COVID-19 impact, Bank Indonesia is increasing
various payment system policy instruments as follows:
a. Supporting government programs to accelerate non-cash social aid program (bansos) disbursements to members of the public in
conjunction with payment system service providers by expediting the electronification of relevant social programs, including the
Family Hope Program (PKH), Noncash Food Assistance Program (BPNT), Pre-Employment Card and Smart Indonesian Card (KIP).
b. Increasing public socialization activities in collaboration with payment system service providers to increase the uptake of non-cash
payment instruments through digital banking, electronic money and broader QRIS acceptance.
c. Relaxing credit card policy by lowering the upper limit for credit card interest, minimum payment requirements and the penalties
for late payments, while supporting credit card issuer policy to extend the due date for customers.
17View entire presentation