2022 State Budget: Fiscal Policy and Structural Reform
Liquidity Remains Very Loose in Line with Accommodative Monetary Policy Stance
and the Impact of Synergy Between BI and the Government to Support Economic
Recovery
Principles for Long Term Government Bond
Market
Mechanism
Purchasing by
Prudent
Maintaining the Credibility of
Monetary Policy and Maintaining
Economic Stability
Tradable &
Measured
Marketable
Considering the
Tradeable
SUN/SBSN
impact on
inflation
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 Rp141.19 trillion
in 2021 (as of 14th Dec 2021)
Bank Indonesia in 2021 has purchased SBN to fund the
2021 State Revenue and Expenditure Budget (APBN) totalling
Rp201.32 trillion, comprising: (i) Rp143.32 trillion through
primary auction in accordance with the Joint Decree (KB)
issued by the Minister of Finance and Governor of Bank
Indonesia on 16th April 2020 and subsequently extended on
11th December 2020 until 31st December 2021, and (ii)
Rp58 trillion through private placement in November 2021 to
fund the health and humanitarian budgets for Covid-19
pandemic handling in accordance with the Joint Decree (KB)
issued by the Minister of Finance and Governor of Bank
Indonesia on 23rd August 2021
The expansive monetary policy stance supports very loose
liquidity conditions in the banking industry, as reflected in
November 2021 by a high ratio of liquid assets to deposits of
34.24% and deposit growth of 10.37% (yoy)
Liquidity in the economy has also increased, as indicated by
narrow (M1) and broad (M2) money supply aggregates, which
grew 14.7% (yoy) and 11.0% (yoy) respectively in the
reporting period, primarily driven by outstanding loans
disbursed by the banking industry and fiscal expansion
Source: Bank Indonesia
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