Indonesia’s c. bank to buy 150t rupiah of state bonds

Indonesia’s central bank will buy 150 trillion rupiah ($9.3 billion) of state bonds in the secondary market next year, replacing around 100 trillion rupiah of maturing bonds from a COVID-era programme, under a deal with the government.

From 2020 to 2022, Bank Indonesia (BI) purchased tens of billions of dollars in government bonds and waived interest payments on some under a ‘burden sharing’ deal with fiscal authorities to fund COVID-19 pandemic costs.

According to the government’s financial report, up to 100 trillion rupiah worth of those notes will reach maturity in 2025.

“BI has agreed to buy government bonds in the secondary market in a bigger amount than the amount that will mature under burden sharing,” Governor Perry Warjiyo told a press conference on Wednesday after BI’s regular monetary policy review meeting.

Warjiyo stated that the plan aligned with the central bank’s goals for monetary operations, and purchasing government bonds was one of the methods used to increase the money supply.

Attribution: Reuters

Subediting: M. S. Salama