Here are BI’s steps to support economic growth

ILLUSTRATION. Governor of Bank Indonesia Perry Warjiyo

Reporter: Bidara Pink | Editor: Khomarul Hidayat

KONTAN.CO.ID – JAKARTA. Bank Indonesia (BI) has issued a number of monetary policy steps in order to support economic growth, especially in the era of the corona (Covid-19) outbreak.

BI Governor Perry Warjiyo explained that the policy mix that was carried out was almost all directed together with the government’s fiscal policy.

“We are together, synergize, and coordinate with the government in encouraging economic growth in the context of national economic recovery from the effects of Covid-19,” said Perry, Thursday (17/9).

Perry also described several monetary policies that have been poured out to support economic growth.

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First, the benchmark interest rate policy. Thursday (17/9), BI announced the results of the BI Board of Governors (RDG) Meeting. From the results of the RDG, BI decided to hold the benchmark interest rate at the level of 4.00%. This benchmark interest rate is even the lowest since 2016 with the hope of being able to boost economic growth.

Second, exchange rate stabilization. Although in the last few moments the rupiah was still vacillating, but BI assured that it would continue to maintain stability in the rupiah exchange rate going forward.

“If the rupiah is stable, economic conditions will also be conducive, and this will boost economic growth,” he said.

Third, monetary expansion with quantitative easing (QE). To date, BI has flushed liquidity amounting to Rp 662.1 trillion to ensure that liquidity in the banking system is more than sufficient to promote national recovery.

Fourth, relaxation of macroprudential policies in the form of lowering down payments for environmentally sound motor vehicle loans, environmentally friendly property loans, as well as motor vehicles and conventional property.

FifthBI has also relaxed the regulations on the macroprudential intermediation ratio (RIM_) and encouraged economic recovery through digitizing the payment system so that it can support the acceleration of the distribution of social assistance (bansos), modes of transportation, and the development of digitizing MSMEs.

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