Bank Indonesia Injects IDR 58 Trillion Into The State Budget Through Private Placement

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Bank Indonesia (BI) in November 2021 is known to have poured fresh funds of IDR 58 trillion into the government treasury through the purchase of Government Securities (SUN) by means of a private placement.

This policy is BI's first step in implementing the Joint Decree (SKB) III of the Minister of Finance and the Governor of Bank Indonesia for the 2022 period.

"(This fund is used by the government) to finance the handling of health and humanity in the context of handling the impact of the COVID-19 pandemic," said BI Governor Perry Warjoyo after the Board of Governors' Meeting (RDG) quoted Monday, December 20.

According to him, the central bank's efforts to support state finances also complement the purchase of similar instruments in the primary market amounting to IDR 143.32 trillion as stated in the Burden Sharing Scheme II (SKB). This amount consists of IDR 67.87 trillion through the main auction mechanism and IDR 75.46 trillion through the Greenshoe Option (GSO) mechanism.

"This purchase is for funding the 2021 State Budget," he said.

Furthermore, the BI boss also informed that throughout 2022 it would disburse funds of no less than IDR 224 trillion to support the state budget (APBN) next year.

For information, SKB III is a continuation of SKB I and SKB II which are valid in 2020 and 2021, respectively. Meanwhile, the purpose of this synergy between the central bank and the government is to bear the shared burden (burden sharing) of the impact of the COVID-19 pandemic through financial operations.

Meanwhile, in the first SKB in 2020, the monetary authority recorded absorbing Government Securities (SBN) of IDR 473 trillion.