Inflation Control and Financial Facilities Strategy
Bank Indonesia Policy Mix: April 2020
Mitigating the risk of COVID-19 transmission
B BANK INDONESIA
BANK SENTRAL REPUBLIK INDONESIA
As a follow-up measure to strengthen monetary and financial market stability in conjunction with the Coordinating
Ministry of Economic Affairs, Ministry of Finance, Indonesian Financial Services Authority (OJK) and Deposit Insurance
Corporation (LPS), the Governor of Bank Indonesia, Perry Warjiyo, on April 1st 2020 delivered The policy mix implemented
by Bank Indonesia to mitigate the COVID-19 impact is as follows:
1) Lower the BI 7-Day (Reverse) Repo Rate in February and March by 25bps respectively;
2) Intensify triple intervention policy in the spot and DNDF markets and purchasing SBN in the secondary market;
3) Reduce the foreign currency reserve requirements for conventional commercial banks from 8% to 4%;
4) Extend the SBN repo tenor and provide daily auctions to loosen rupiah liquidity as well as increase the frequency of FX Swap
auctions to daily in order to ensure adequate liquidity;
5) Expand the types of underlying transactions for Domestic Non-Deliverable Forwards (DNDF), thus increasing hedging alternatives
against rupiah holdings in Indonesia;
6) Lower the rupiah reserve requirements by 50bps for banks that are engaged in export-import financing, as well as the financing of
MSMEs and other priority sectors;
7) Loosen the Macroprudential Intermediation Ratio (MIR);
8) Provide hygienic currency fit for circulation, reduce the costs of the National Clearing System (SKNBI), maintain a QRIS Merchant
Deposit Rate (MDR) of 0% for micro-merchants, and support non-cash disbursements of various government programs, including
the Family Hope Program (PKH) and Noncash Food Assistance Program (BPNT), as well as the Pre-Employment Card and College
Smart Indonesia Card.
Bank Indonesia reiterated that rupiah exchange rates are currently adequate and the outlook scenario formulated for the main
macroeconomic indicators is a form of forward-looking anticipatory measure towards prevention through joint efforts, while Bank
Indonesia continues to maintain rupiah stability.
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