Indonesia’s central bank ready to finance more fiscal deficit for COVID-19 fight
Indonesia's central bank (BI) is ready to further finance the government's budget deficit and "share the burden" in the fight against the COVID-19 pandemic, BI Governor Perry Warjiyo said on June 27.
The logo of Indonesia's central bank (BI) is seen on a window in the bank's lobby in Jakarta (Source: Reuters)
Hanoi (VNA) – Indonesia's central bank (BI) isready to further finance the government's budget deficit and "share theburden" in the fight against the COVID-19 pandemic, BI Governor PerryWarjiyo said on June 27.
During an online seminar, Warjiyo said he and Indonesian FinanceMinister Sri Mulyani Indrawati had agreed to accelerate budget deficitfinancing for responding to COVID-19.
The BI and the finance ministry are in their final stage ofagreement for the deficit financing scheme and they would work withparliament's finance commission and the Audit Board of Indonesia to ensureaccountability, Warjiyo said.
He reiterated at the seminar that BI has scope to trim itsmain policy rate further.
Since the beginning of this year, BI has so far bought 40trillion rupiah (2.83 billion USD) of government bonds directly in auctions. Ithas also purchased 166.2 trillion rupiah of bonds in the secondary market.
In total it has injected 614.8 trillion rupiah of liquidityinto the financial system, including via bond buying operations, the governorsaid.
Indonesia’s fiscal deficit this year is expected to be 6.3percent of its GDP, up from an initial plan of 1.8 percent, with the governmentforecasting a 10 percent drop in revenue and allocating nearly 50 billion USDfor the COVID-19 budget./.
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The logo of Indonesia's central bank (BI) is seen on a window in the bank's lobby in Jakarta (Source: Reuters)
