2022 State Budget: Fiscal Policy and Structural Reform
Strengthened Synergy Between Monetary and Fiscal Policy
Policy Synergy Between Bank Indonesia and the Government Contributes to the
Acceleration of Economic Recovery
The Enactment of Emergency Law No.1/ 2020 (Becoming Law No.2/2020) Allows BI to Buy GS in the Primary Market
1st Joint Decree between Minister of Finance and Governor of
Bank Indonesia (BI) on April 16, 2020 (SKB I). The role of Bl is
to act as backstop buyer in the primary market
2nd Joint Decree between Minister of Finance and Governor of BI on July 7,
2020 amended with Joint Decree on July 20, 2020 (SKB II) puts in place the
burden sharing scheme between Government and BI
3rd Joint Decree Between Minister of Finance and Governor of BI on August 23, 2021 (SKB III)
The Third Joint Decree concerns the scheme and coordination between the Government and Bank Indonesia in the context
of financing healthcare and humanitarian handling as a response to the current condition of the COVID-19 pandemic
GOVERNMENT SECURITIES (SBN) ISSUANCE AND BI CONTRIBUTION SCHEME
BI contributes all interest costs
on the financing for vaccination
and healthcare with a maximum
amount of IDR58T (2021) and
IDR40T (2022), taking into
account BI's balance sheet
capacity and capability
The remaining interest costs for
financing other health care as
Cluster A
2021 IDR58 T
2022 IDR40 T
Cluster A:
• Healthcare includes
vaccination program and
other healthcare
financing related to
COVID-19 pandemic
Interest Rate
BI reverse repo
3 Months Tenor
BANK INDONESIA
GOVERNMENT
• The issuance of
Government
Securities is done
through a private
placement: reducing
the target for SBN
auction and manage
cost of debt
• All Government
Securities are issued
at variable rate using
BI 3-month Reverse
Repo Interest Rate.
• SBN is tradable and
marketable
Cluster B:
Cluster B
• Healthcare
well as humanitarian handling
COVID-19
related
pandemic
to
Interest Rate
BI reverse repo
3 Months Tenor
will be covered by the
2021
Government with a reference
interest rate for BI RR 3M
2022
IDR157 T
IDR184 T
other than Cluster A
•⚫ Humanitarian handling in
the form of various
protection programs for
affected communities/
small businesses
(below market rate)
Source: Ministry of Finance, Bank Indonesia
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