BI buys Rp40.77 trillion in government bonds to help finance budget

Jakarta Bank Indonesia (BI) bought sovereign debt papers (SBN) worth Rp40.77 trillion in the primary market on Tuesday (February 16, 2021) to help finance the 2021 state budget.

“BI continued its purchase of SBNs from the primary market to finance the 2021 state budget,” BI Governor Perry Warjiyo said in an online press conference in Jakarta on Thursday.

SBNs worth Rp18.16 trillion were purchased through the main auction mechanism and Rp22.61 trillion through the Greenshoe Option (GSO) mechanism, he informed.

He said the SBN purchase was in line with the joint decree of the Finance Minister and the BI governor dated April 16, 2020, which has been extended until December 31, 2021. The SBN purchase through the direct mechanism was based on the joint decree of the finance minister and the BI governor dated July 7, 2020, which is only valid for financing the 2020 state budget.

Throughout 2020, BI purchased SBNs worth Rp473.42 trillion in the primary market to help finance the 2020 state budget.

Warjiyo further said the banking and money market liquidity has remained loose because BI has raised liquidity, or quantitative easing (QE), since 2020.

Since last year, BI has disbursed Rp750.36 trillion in quantitative easing measures, accounting for 4.86 percent of the national gross domestic product (GDP). The figure comprises Rp726.57 trillion disbursed in 2020 and Rp23.81 trillion on February 16, 2021.

The loose liquidity in January, 2021 has raised the ratio of liquidity instruments to third-party funds to reach 31.64 percent and led to high third-party fund growth of 10.57 percent.



Source: Antara News


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