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Jakarta Post

BI to provide banks with liquidity in loan scheme

  • Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, May 22 2020   /  12:20 am

Bank Indonesia (BI) will help provide liquidity for local banks involved in a loan-restructuring program for micro, small and medium enterprises (MSMEs) as a part of its efforts to support the country’s economic recovery.

BI Governor Perry Warjiyo said on Tuesday that banks could use sovereign debt papers they held as underlying assets for repurchase (repo) agreements with the central bank to get fresh funds.

Indonesian banks owned Rp 886 trillion (US$59.77 billion) in government bonds and could trade Rp 563.6 trillion worth with the central bank should they need liquidity. The remaining Rp 330.2 trillion is reserved for banks to maintain their liquidity needs.

“Overall, banks still have a lot of government bonds they can use as [underlying assets in] repos with the central bank in order to meet their liquidity needs for MSMEs’ credit restructuring,” Perry to...