JAKARTA Bank Indonesia (BI) is said to continue to make efforts to expand repurchase agreement (repo1) transaction actors, especially banks, to develop modern financial markets, increase the effectiveness of monetary policy transmission, and encourage financial system stability.
BI Senior Deputy Governor Destry Damayanti said this was realized through the facilitation of the symbolic signing of the interbank repo master agreement or the Global Master Repo Agreement (GMRA) contract.
According to Destry, in the last three years, repo transactions in the Indonesian money market have increased dramatically. It was stated that the value of money market transactions in 2023 reached IDR 11.4 trillion per day, higher than 2020 and 2021 of IDR 500 billion and IDR 4.4 trillion.
"We want the money market to be safer through repo transactions," he said in a written statement on Tuesday, May 30.
Destry explained that all these efforts could not be made from the regulator's side, but with synergies between regulators, agencies and market participants.
"There are three urgencys for the development of repo, namely first, repo transactions as a source of national economic financing, secondly the need for the implementation of primary open and third market operations, carrying out the mandate of the P2SK Law regarding BI's authority in the money market and foreign exchange as well as support for strengthening financial markets including repo," he said.
Furthermore, repo transactions that have been dominated by several state-owned banks and followed national private banks and regional development banks and are expected to develop in other banks.
On the same occasion, Member of the OJK Board of Commissioners, Inarno Djajadi, supports every effort to increase transactions in the financial market, including repo transactions. He assessed that the signing of the understanding could encourage the strengthening of the secondary market.
The 'Mindset for repo must be improved, no longer related to banks that are experiencing difficulties but as an effort to encourage market deepening. Market development efforts are a commitment that continues to be carried out by OJK and BI as well as other stakeholders," he said.
Meanwhile, the signing was carried out by 76 banks, consisting of 71 conventional banks, 4 Islamic commercial banks and 1 sharia business unit.
There is a total signing of 246 interbank repo master contracts. This is included in the repo development initiative in 2023, which is focused on supporting the consolidation of monetary operations participants and money market players with Primary Dealers (PDs) classification.
Meanwhile, the liquid repo market will accelerate the deepening of the financial market as a source of national economic financing in order to achieve Indonesia Maju's 2045 vision. The strategic role and benefits of the development of repo transactions need to be understood not only by regulators but also by market participants.
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