Bank Indonesia Policy Mix

Liquidity Remain Loose In Line with Accommodative Monetary Policy Stance to Support the Economic Recovery Principles for Long Term Government Bond Purchasing by Bank Indonesia in the Primary Market Prudent Maintaining the Credibility of Monetary Policy and Maintaining Economic Stability Market Mechanism Tradable & Measured Marketable Tradeable Considering the SUN/SBEN impact on inflation Source: Bank Indonesia Govern Uphold Good Governance Sustainable Last Resort Bl as a standby buyer for Non-Public Goods • • Bank Indonesia has injected liquidity through quantitative easing (QE) to the banking industry totalling IDR129.92 trillion in 2021 (as of 15th October 2021). In addition, Bank Indonesia continues to purchase SBN in the primary market to fund the 2021 State Revenue and Expenditure Budget (APBN), totalling IDR142.54 trillion (as of 15th October 2021), with IDR67.08 trillion through primary auction and IDR75.46 trillion through Greenshoe Option (GSO) The expansive monetary policy stance supports very loose liquidity conditions in the banking industry, as reflected in September 2021 by a high ratio of liquid assets to deposits of 33.53% On the other hand, deposit growth has moderated to 7.69% (yoy), impacted by recoveries of business activity and private consumption Liquidity in the economy has increased, as indicated by narrow (M1) and broad (M2) money supply aggregates, which grew 11.2% (yoy) and 8.0% (yoy) respectively in the reporting period, primarily driven by bank lending to finance the national economic recovery 125

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