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View all search resultsBI continues burden-sharing scheme, buys $12b worth of govt bonds
The central bank has announced a continuation of its burden-sharing scheme with the government and has purchased trillions of rupiah worth of government bonds this year, but an economist questions the legal basis for continuing a policy initially intended as a crisis response.
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Bank Indonesia Governor Perry Warjiyo speaks during a press conference at the central bank's headquarters in Jakarta on Jan. 15, 2025. (Reuters/Willy Kurniawan)
T
he central bank has announced a continuation of its burden-sharing scheme with the government and has purchased trillions of rupiah worth of government bonds this year, but an economist has questioned the legal basis for continuing a policy initially intended as a crisis response.
Speaking at an online meeting before Committee IV of the Regional Representatives Council on Tuesday, Bank Indonesia (BI) Governor Perry Warjiyo revealed that BI has purchased Rp 198 trillion (US$12 billion) worth of government bonds so far this year, including Rp 12 trillion since on Aug. 19.
“Some of the funds from these bonds are for financing community economy programs under the Asta Cita [agenda] like people’s housing and the Red and White village cooperatives,” said Perry, referring to President Prabowo Subianto’s vision for political and economic development.
“Burden sharing, or sharing of the interest burden, will reduce the financing burden for community economy programs under Asta Cita,” he added.
The burden-sharing scheme, which enlists the central bank in shouldering the cost of financing the state budget, was introduced during the coronavirus pandemic in 2020.
Read also: Govt, BI shake hands on $40b burden-sharing scheme toward COVID-19 recovery
Under the scheme, BI can buy government bonds in the primary or secondary market but returns all or part of the interest it earns on the coupon.
