BI Affirms Burden Sharing With Government In Accordance With Prudent Monetary Policy Principles

Bank Indonesia (photo: Antara)

JAKARTA - Head of the Communication Department of Bank Indonesia (BI) Ramdan Denny Prakoso said to reduce the cost burden related to the people's economic program in Asta Cita, Bank Indonesia agreed to distribute interest expense (burden sharing) with the Government.

He explained that the distribution of interest expense was carried out by dividing the average interest costs for the issuance of Government Securities (SBN) for Government programs related to Public Housing and Cooperatives of Red and White Villages (KDMP) after deducting receipts for the placement of Government funds for the two programs in domestic financial institutions.

"In its implementation, the distribution of expenses is carried out in the form of providing additional interest on Government accounts in Bank Indonesia in line with the role of Bank Indonesia as a Government cash holder as referred to in Article 52 of the Bank Indonesia Law no. 23 of 1999 as amended by Law no. 4 of 2023 concerning P2SK in conjunction with Article 22 and in line with Article 23 of Law no. 1 of 2004 concerning State Treasury," he said in his statement, Thursday, September 4.

In addition, he said that the amount of additional interest expense by Bank Indonesia to the Government remains consistent with monetary programs to maintain economic stability and synergize to provide fiscal space to encourage national economic growth and ease the burden on the people.

Denny said the synergy of fiscal and monetary policies to encourage economic growth still refers to the principles of prudent fiscal and monetary policy and maintain market discipline and integrity (market discipline and integrity).

According to him, the Government is directing Asta Cita's achievements in people's economic programs, including the People's Housing and Cooperative Program of Merah Putih Village.

Meanwhile, he explained that Bank Indonesia's support was carried out through purchasing SBN in the secondary market and sharing interest expense with the government for the programs set by the Government.

He emphasized that Bank Indonesia's support was still pursued in accordance with the rules of prudent monetary policy.

"The purchase of SBN in the secondary market is carried out in a measured, transparent and consistent manner with efforts to maintain economic stability so that it continues to maintain the credibility of monetary policy," he said.