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Jakarta Post

‘No need for unusual policies’: BI refuses to print money to support economy

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Wed, May 6, 2020   /   06:46 pm
‘No need for unusual policies’: BI refuses to print money to support economy Bank Indonesia Governor Perry Warjiyo talks during a livestreamed briefing in Jakarta on Wednesday. (Courtesy of Bank Indonesia/-)

Bank Indonesia (BI) has emphasized that it will not print money to help fund the surge in government spending to fight the COVID-19 pandemic.

BI Governor Perry Warjiyo said the suggestion to print money was not a prudent monetary policy, pledging that the central bank would never take the measure.

“This is an unusual policy and BI will never take such measures, including giving out money to the general public to face the COVID-19 pandemic,” Perry told reporters on Wednesday. “I am very sorry, but we should not confuse the public.”

Calls have grown among lawmakers as well as former trade minister Gita Wirjawan, among others, for the central bank to print money to support the virus-battered economy and help fund the COVID-19 battle.

Gita asked the central bank to print Rp 4 quadrillion (US$264.29 billion) to protect the economy, adding that the money should be used by the public to purchase their basic needs.

“The money will not only be used to provide stimulus packages for those who have lost their jobs, but also to rescue the real sector, as well as micro, small and medium businesses,” Gita said, as quoted by Kompas.com.

“There is no need for unusual policies like printing money” to meet liquidity needs, he added.

The government will offer another Rp 856.8 trillion in government bonds for the rest the year to address the widening budget deficit.

BI has ramped up its bond-buying program by purchasing Rp 173.1 trillion worth of government bonds from the primary market and from foreign investors in the secondary market, similar to the moves made by the United States Federal Reserve, among other central banks, to support their countries’ fiscal needs.