Bank Indonesia Policy Mix

Further Strengthening of an Accommodative Bank Indonesia's Policy Mix BGM: Lower/Hol dBI 7-day Reverse Repo Rate Stabilization Of The Rupiah Money Market & Foreign Exchange Quantitative Easing Macro- Prudential Policy Payment System Policy BGM 20-21 JAN, 17-18 FEB AND 17-18 MARCH 2021 1. Hold BI7DRR at 3.75% in Jan, lower it to 3.50% in Feb and Hold it in March. 2. Accelerating money market deepening by strengthening JISDOR (methodology, transaction monitoring period and publication schedule) as IDR reference rate against USD 3. Relaxing down payment requirements on automotive loans/financing to min 0% for all new motor vehicles and relaxing the LTV/FTV ratio on housing loans/financing to maximum 100% on all residential property for banks meeting specific NPL/NPF criteria, and repealing regulations on the gradual liquidation of partially prepaid property. Both effective from 1 Mar until 31 Dec 2021. 4. Publishing the "Assessment of Policy Rate Transmission to Prime Lending Rates in the Banking Industry" in February 5. Strengthening Prime Lending Rate (SBDK) transparency in the banking industry, while coordinating with the Government and other relevant authorities to: (i) accelerate monetary policy transmission to lending rates in the banking industry; and (ii) stimulate lending/financing to the corporate sector. 6. Strengthening MIR/Sharia MIR policy through the inclusion of export L/C as a financing component, while incrementally introducing regulatory disincentives in the form of MIR related reserve requirement, to stimulate bank lending to the corporate sector and export-oriented businesses 7. Supporting the Regional Digitalisation Acceleration and Expansion Teams (TP2DD) to stimulate innovation, accelerate and expand Electronification of Regional Government Transactions (ETP) and integrate the digital economy and finance. 8. Supporting development of an inclusive and efficient digital economy & finance ecosystem, by: . • Extending the QRIS 0% MDR for micro enterprises until 31st December 2021; Expanding QRIS acceptance to 12mil merchant BGM 19-20 APRIL, 24-25 MAY AND 16-17 JUN 2021 1. Hold BI7DRR at 3.50% 2. Expanding the use of (SukBI) for tenors of 1 week to 12 months, effective from 16th April 2021. 3. Maintaining accommodative macroprudential policy by holding the CCyB at 0%, the MPLB at 6% with repo flexibility at 6%, as well as Sharia MPLB at 4.5% with repo flexibility also at 4.5%. 4. Expanding money market deepening efforts by accelerating the establishment of a Central Counterparty (CCP) as well as standardising repo transactions for clearing via the CCP. 5. Lowering the upper limit on credit card interest rates from 2% to 1.75% per month, effective 1st July 2021 6. Extending the National Clearing System (SKNBI) pricing policy of IDR1 from BI to banks and a maximum of IDR2,900 from banks to customers from 30th June 2021 previously until 31 Dec 2021. 7. Extending policy of lower late payment penalties on credit cards at 1% of the outstanding balance, or max of IDR 100,000, until 31 Dec 2021, to encourage the use of credit cards as a private consumption buffer to support the national economic recovery. 8. Strengthening PLR transparency in the banking industry with an emphasis on suppressing higher interest rates on new loans, the affecting factors (increasing risk perception and profit margin) as well as PLR analysis at individual banks 9. Accelerating the money market deepening program by strengthening the corresponding regulatory framework and implementing the Multi-Matching ETP, specifically targeting the Rupiah money market and FX market. 10.Strengthening QRIS policy by: • Raising the QRIS transaction limit from IDR 2 mil to IDR 5 mil, effective from 01/05/21 Lowering the MDR for Public Services Agencies (BLU) and Public Service Obligations (PSO) 0.7% to 0.4% effective from 01/06/21 BGM 21-22 JUL, 18-19 AUG, 20-21 SEP 2021 1. Maintaining rupiah exchange rate policy to preserve stability in line with the currency's fundamental value and market mechanisms. 2. Continuing the strengthening strategy for monetary operations to reinforce the effectiveness of accommodative monetary policy. 3. Nurturing intermediation by strengthening prime lending rate (PLR) transparency with an emphasis on the risk premium and its impact on setting interest rates for new loans across various credit segments (appendix). 4. Strengthening the payment system ecosystem through PBI PJP/PIP implementation to simplify a more efficient licensing/approval process, while fostering innovation in terms of payment system services. 5. Accelerating Quick Response Code Indonesia Standard (QRIS) uptake, including cross-border QRIS, and implementing the National Open API Payment Standard (SNAP) towards broader digital economic and financial integration. 6. Increasing support for a fast, simple, affordable, secure and reliable payment system that underpins government social aid program (bansos) disbursements and online transaction efficiency. 7. Strengthening exports by extending the SPE exemptions that were due to end on 29th November 2020 until 31st December 2022 in order to exploit increasing demand in trading partner countries as well as rising international commodity prices. 8. Promoting trade and investment as well as continuing to socialise the use of local currency settlement (LCS) in conjunction with other relevant institutions. Board of Governor Meeting Source: Bank Indonesia T26

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