Deputy Minister Of Finance Suahasil Describes The Success Of Burden Sharing With BI At The G20 Forum

Deputy Minister of Finance Suahasil Nazara (Photo: screenshot of BI Youtube)

JAKARTA - The government through the Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said that an important factor in overcoming current economic pressures is the establishment of a good cooperative relationship with Bank Indonesia (BI).

According to Suahasil, one of the implementations of the synergy between the government and the central bank is through the implementation of a joint financing scheme from the State Budget through a burden sharing scheme.

"We have reached an agreement with Bank Indonesia to implement a burden sharing scheme, this is a form of building state financial stability, especially in terms of financing," he said when speaking at the G20 forum entitled International Best Practices and Lessons Learned on LIBOR Transition in Developing A Robust. and Credible Reference Rate, Monday, June 13.

Suahasil added that BI's contribution in supporting government financing has a strategic role to fulfill state spending, especially those that are directly related to the wider and vulnerable community groups.

“Of course, this also helps the government to strengthen the energy subsidy budget. The government and Bank Indonesia have a high commitment to continue efforts to make the recovery stronger in conditions of continued uncertainty," he said.

Deputy Sri Mulyani also hoped that the sustainability of government and central bank policies could continue in the future so that development goals could be achieved effectively.

“So we think that this is very important to help the financial sector to be more stable, the real sector to be stronger. In general, the government sees that this cooperation will continue with the fiscal and monetary policies that are in rhythm,” he said.

VOI noted that the collaboration between the government and Bank Indonesia was contained in a Joint Decree (SKB) between the Minister of Finance and the Governor of BI. This SKB came into effect in 2020 with a financing commitment from BI to the State Budget of IDR 473.42 trillion.

Then the SKB II for the 2021 period with a realization of around Rp. 201 trillion. Then in SKB III this year, the monetary authority plans to purchase Government Securities worth IDR 224 trillion.

Meanwhile, this Joint Decree will only be valid until 2022. This means that the burden sharing scheme of SKB IV will no longer exist in 2023 in line with the government's efforts to restore the state budget with a budget deficit of below 3 percent.

It is important to note that the fresh funds disbursed by the monetary authority to the state treasury are quite competitive in terms of interest rates.

The government only needs to pay SBN interest at the BI rate minus 1 percent for non-public goods spending. Meanwhile, 0 percent interest is charged for purchases aimed at public goods.