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View all search resultsAccording to the World Bank, the introduction of the SRBI has had unintended consequences of crowding out government borrowing, as commercial banks have reduced their holdings of government securities and turned toward BI’s new securities.
Falling interest rates in developed economies should see more portfolio investment flow back into emerging markets like Indonesia, but some sectors stand to benefit more than others, and caution is warranted as fears of a US recession continue to haunt global markets.
The central bank kept interest rates unchanged after a two-day meeting but announced plans to "reduce its purchase amount of JGBs (Japanese Government Bonds) thereafter to ensure that long-term interest rates would be formed more freely".
Investors are holding back from the government bond market amid rising interest rates to fend off high inflation in many major economies, leaving emerging countries like Indonesia struggling to keep up with investors’ appetite to secure capital at home.
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