Secretary to the coordinating economic affairs minister, Susiwijono Moegiarso, said Thursday the government would issue a government regulation in lieu of law (Perppu) on Friday to facilitate the plan.

The so-called "recovery bond" can be bought by Bank Indonesia (BI), as well as exporters and importers, Susiwijoyo said, adding the Perppu would enable the central bank to buy government bonds not only in the secondary market. The existing law on BI prohibits the central bank from buying government bonds except in the secondary market.

"The government will handle the proceeds of the funds to finance all businesses. This is to awaken business activities," Susiwijono said during a media briefing.

Companies looking to receive funds from bond sales were barred from employee layoffs, he said. "If they need to lay off employees, then they must keep at least 90 percent of their employees with the same salary amounts [as before the crisis]."

Read also: Battered by virus: Businesses across Indonesia feel the pinch

The government’s plan comes as European Central Bank chief Christine Lagarde asks euro zone finance ministers to seriously consider a one-off joint debt issue of “coronabonds” to help fight the coronavirus pandemic, Reuters reported.

The COVID-19-driven slowdown was likely to slash Indonesia’s growth to just above 4 percent this year, the lowest in 15 years, Finance Minister Sri Mulyani Indrawati said as the government prepares for the worst-case scenario of zero growth. From empty malls to factory disruptions, micro and small businesses have suffered the most.

The government would reallocate Rp 62.3 trillion (US$3.9 billion) of state spending from the 2020 budget to tackle COVID-19 in Indonesia, on top of the Rp 120 trillion allocated to stimulate the economy.

BI has also spent Rp 168.2 trillion so far this year, buying government bonds in the secondary market to stabilize the rupiah as foreign investors dump Rp 125.2 trillion worth of government bonds. The rupiah, now at around Rp 16,277 per US dollar, is the worst-performing currency in Asia.

“The central bank will continue to intervene through the spot market, domestic non-deliverable forwards and bonds if needed," Perry pledged as the rupiah weakened almost 20 percent since January.

As of Wednesday, Indonesia had 790 confirmed cases of COVID-19 and 58 deaths. Globally, the pneumonia-like illness has infected over 471,000 people and has claimed at least 21,000 lives.

President Joko “Jokowi” Widodo has revealed that government officials and legislators are in talks to raise Indonesia’s budget deficit cap, which would allow the state to borrow more money to fund emergency response measures to the pandemic. The budget deficit cap could be raised to 5 percent from the current 3 percent ceiling.