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BI: Purchase of SBN will not cause inflation

27 April 2020 06:31

JAKARTA - Bank Indonesia (BI) ensures that its action of purchasing Government Securities (SBN) on the primary market will not cause inflation. This was conveyed by BI Governor Perry Warjiyo, as quoted from the Ministry of Finance page last week (24/2).

According to Perry,  according to Perppu No.1 / 2020, the purchase of SBN is considered as additional financing to reduce the fiscal deficit. "If the regular auction does not produce satisfactory results, BI (acting, red) is the last resource, meaning that BI becomes a non-competitive bidder in the regular auction," he said.

He said that the government would seek funding for COVID-19 mitigation efforts from other sources, such as government budget surplus (SILPA), Public Service Agency (BLU) funds, funds from world financial institutions such as the ADB and World Bank as well as the issuance of global bonds such as RI1030, RI1050 and RI0470, all of which have a total value of US$ 4.3 billion.

"The government will first maximize existing sources of funds (such as) SiLPA, funds at BLU, Asian Development Bank funding, World Bank and so on, also issue global bonds," he said (LK/AR)

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