Bank Indonesia Disburses IDR 131 Trillion To Assist The Government In Funding The 2021 State Budget

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) Governor, Perry Warjiyo, said the monetary authority had played an active role in supporting state finances.

This is reflected in BI's move to purchase Government Securities (SBN) in the primary market with a record of IDR 131.96 trillion until August 16, 2021. Of this amount, IDR 56.50 trillion was purchased through the main auction mechanism and IDR 75.46 trillion through the Greenshoe Option (GSO) mechanism.

"Bank Indonesia continues to purchase SBN in the primary market as part of the policy synergy between Bank Indonesia and the Government for funding the 2021 State Budget", he said in an online press statement after holding a Board of Governors Meeting, Thursday, August 19

According to Perry, liquidity conditions that remain loose, driven by accommodative monetary policy and the impact of Bank Indonesia's synergy with the government will further support the national economic recovery.

"Bank Indonesia has also added liquidity (quantitative easing) in banks by IDR 114.15 trillion in 2021 (until August 16, 2021)", he said.

Furthermore, through this monetary expansion, banking liquidity conditions in July 2021 were very loose, as reflected in the high ratio of Liquid Assets to Third Party Funds (AL/DPK), which was 32.51 percent, and the growth of third party funds (DPK) of 10.43 percent YoY.

On the other hand, economic liquidity also increased, reflected in the narrow (M1) and broad (M2) money supply which grew by 14.9 percent YoY and 8.9 percent YoY in July 2021, respectively.

“Growth in money supply was mainly supported by increased fiscal and monetary expansion as well as bank credit which continued to grow positively. Going forward, continued improvement in credit activity is expected to further enhance the role of liquidity expansion in promoting economic recovery through the velocity of money in the economy”, explained Perry.