The headquarters of the Bank Indonesia (Photo: https://www.thejakartapost.com/)Jakarta (VNA) – The Bank Indonesia (BI) hasinjected 503.8 trillion Rp (around 32.7billion USD) into banks and the debt market to stabilise therupiah and help support the government’s financing needs to combat the economicshocks of the COVID-19 pandemic.
BI GovernorPerry Warjiyo said that banks would be obliged to buy government bonds afterthe central bank freed up 102 trillion Rp in liquidity. Starting on May 1, the reserve requirement ratio will belowered by 200 basis points (bps) for commercial banks and 50 bps for shariabanks.
BI’s policy torevoke banks’ obligation to fulfil the Intermediary Macroprudential Ratio (RIM)would add another 15.8 trillion Rp of liquidity, said Perry.
This is inaddition to the 386 trillion Rp worth of liquidity freed by the central bank since the beginningof the year to support the country’s crashing currency and boost banks’liquidity, Perry said.
The centralbank has bought 166.2 trillion Rp worth of government bonds in the secondary market as investorsdumped Indonesian assets over fears about COVID-19, resulting in a slump in thevalue of the rupiah, which depreciated as much as 18.5 percent in early March.
The rupiah hasstarted to gain against the greenback over the last few weeks, strengthening to15,394 Rp per USD as per 11 a.m. on April29 from this year’s low of16,625 per US dollar, according to Bloomberg data./.
VNA
