Open Market Operations (OMO) are transaction in the money market and/or foreign exchange market conducted by Bank Indonesia with Banks and/or other parties for monetary operation in a conventional manner and based on sharia principles. OMO in domestic currency is divided into two, namely OMO absorption and OMO injection, considering liquidity conditions in the banking system both conventional and sharia. OMO absorption is performed to absorb excess liquidity while OMO injection is undertaken to increase liquidity in order to maintain a balance of liquidity conditions to support the achievement of monetary operations target. OMO can be carried out regularly and non-regularly. Regular OMO is conducted on a scheduled basis through an auction. Meanwhile, non-regular OMO can be conducted at any time (fine-tune operation) to strengthen the achievement of monetary operations target through the implementation of regular OMO. BI announces plans and results of regular and non-regular OMO auctions through the website of BI and/or other designated means.
In order
to support the strengthening of the monetary operations strategy that is integrated with the development of the money market and foreign exchange market,
Bank Indonesia implements primary dealers.
Bank Indonesia sets out activities
that can be performed
by primary dealers including
OMO transactions that can be participated by primary dealers. The implementation of
primary dealers
will be carried out gradually in line with the
market
readiness and
the support of
financial market infrastructure. In the initial stage, OMO transactions
that can be participated by primary dealers are
the auction of SRBI
issuance and non-auction conventional OMO Repo transactions. These transactions will be effective for primary dealers from May 17, 2024. At the next stage, DNDF transaction are implemented with primary dealers (non-auction), effective as of August 27, 2025.
Instruments for OMO in domestic currency are as follows:
OMO in foreign currency is conducted through intervention instruments (spot, forward, and DNDF) as well as liquidity management instruments aimed at supporting the stability of the Rupiah exchange rate (FX swap, FX term deposit, BI FX bills, and sharia FX term deposit).
Instruments for OMO in foreign currency are as follows:
