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Govt, BI approve $30b burden-sharing scheme
This third burden sharing scheme is meant to help the government finance COVID-19 relief efforts, following the second coronavirus wave.
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Finance Minister Sri Mulyani Indrawati speaks at a webinar. (Finance Ministry/Faiz)
T
he government and Bank Indonesia (BI) have agreed on a third burden-sharing scheme to help finance the nation’s COVID-19 healthcare and social assistance relief programs.
Finance Minister Sri Mulyani Indrawati told reporters on Tuesday that the central bank would buy Rp 439 trillion (US$30.48 billion) in government bonds between 2021 and 2022.
BI would charge a coupon rate corresponding to its seven-day reverse repo rate (7DRRR), which averaged 3.39 percent this year, much lower than the benchmark 10-year bond yield average of 6.79 percent this year.
“This is a cooperation between the Finance Ministry and BI to face the disaster that is the COVID-19 pandemic,” Sri Mulyani said.
Of the total funds, Rp 341 trillion will go to social assistance and micro, small and medium enterprises (MSME) relief programs, and the remaining Rp 98 trillion will mostly go to the national vaccine drive. The government will pay the former amount, while BI will bear the costs of the latter amount.
Read also: Indonesia’s burden-sharing scheme may affect BI's credibility: Moody’s
This is the third time the Finance Ministry and BI have collaborated on the burden-sharing scheme, dubbed Joint Ministerial Decree Three (SKB III) after launching the first in April 2020 and the second in July 2020.
