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​​​Communication Department
4/29/2020 3:00 PM
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Latest Economic Developments and BI Measures against COVID-19 (29 April 2020)

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Monitoring the latest economic conditions in Indonesia, the impact of COVID-19 in particular, Bank Indonesia Governor, Perry Warjiyo, announced 5 (five) latest developments on Wednesday (29/4) along with the policy measures instituted by Bank Indonesia as follows:

1.   Inflation controlled and low
The Price Monitoring Survey conducted by Bank Indonesia and 46 Bank Indonesia Representative Offices as of the fourth week of April 2020 shows that prices in the market are controlled and low. Inflation in April 2020 is estimated to stand at 0.18% (mtm) or 2.78% (yoy). The inflation estimate in April 2020 is lower than inflation in March 2020 which stood at 2.96% (yoy) and in February 2020 at 2.98% (yoy). It confirms that by the end of 2020, inflation will remain controlled and low at 3±1%.
The main contributors to inflation in the reporting period among others are shallots (0.12%), gold jewelries (0.09%), oranges (0.05%), and granulated sugar (0.02%). Meanwhile, commodities contributing to deflation are red chilies (-0.11%) and non-breed chicken meat (-0.08%) It shows the government’s commitment to maintain steady supply and fulfillment of basic commodities.
Inflation during Ramadan and Eid al-Fitr is estimated lower than its historical pattern attributable to low demand as influenced by COVID-19 pandemic which results in limited human activities due to mobility restrictions, large-scale social distancing (PSBB), etc.
2.    Rupiah exchange rate stable and will appreciate to a level of Rp15,000 at the end of the year
On Tuesday (28/4), rupiah was closed at a level of Rp15,380, weaker by Rp70 than the day before at Rp15,310 (27/4). Exchange rate movement is affected by technical factors, such as relatively high corporate demand for foreign currency according to its historical pattern, and the government’s measures to implement large scale social restrictions in different areas, which some market actors perceive to decrease economic growth.  In addition, Fitch rating agency predicts Indonesia’s economic growth in 2020 will stand at 2.8% (yoy), lower than last year but higher than Bank Indonesia’s estimate of 2.3% (yoy).
Meanwhile, several positive factors influence exchange rate movement, namely high incoming bid of Government Securities (SBN) auction amounting to Rp44.4 trillion. It indicates strong interest of foreign and domestic investors in buying SBN. In addition, stronger stock futures in the United States and Europe become a positive factor influencing exchange rate movement.
Overall, rupiah exchange rate moves steadily and will appreciate to a level of Rp15,000 at the end of the year as supported by 4 factors:
a.    Fundamentally, rupiah exchange rate remains undervalued as supported by current account deficit in Quarter I which will be lower than 1.5% of GDP, and overall, in 2020 it will be lower than 2% of GDP. Such declining current account deficit means foreign exchange shortage will be lower, thereby supporting stronger rupiah exchange rate toward its fundamental value. 
b.   Bank Indonesia will always be in the market and take necessary measures to maintain exchange rate stability.
c.    Foreign capital inflow to Indonesia is estimated to increase. Historically, from 2011-2019 in Indonesia, outflow is relatively small within a short period, followed by considerable inflow within a long period. Data shows average outflow is Rp29.2 trillion within a duration of 3-4 months, followed by inflow of Rp229.1 trillion within a duration of 21 months.
d.    Risk premium is estimated to decrease after COVID-19 pandemic ends.
3.   BI’s participation in buying SBN in the primary market
In yesterday’s SBN auction (28/4), the government indicated an auction target of Rp20 trillion with a maximum target of Rp40 trillion. According to the Memorandum of Understanding between Bank Indonesia and the Ministry of Finance, SBN purchase in the primary market by Bank Indonesia as a non-competitive bid amounts to 25% at the maximum of the maximum target or around Rp10 trillion, but Bank Indonesia will prioritize market actors, and therefore, only bid Rp7.5 trillion.  The winning amount in SBN auction out of Rp44.4 trillion is Rp16.6 trillion, where Rp2.3 trillion is for Bank Indonesia and the remaining Rp14.3 trillion is won by the market.
According to the memorandum of understanding, if SBN auction target is not reached, the Government may implement a green shoe auction using the previous day’s price (28/4), which is weighted average for 10-year SBN yield of 8.08% with an auction target of Rp23.38 trillion. In implementation of additional auction, Bank Indonesia may also bid at around Rp7.5 trillion. If the target cannot be achieved after such additional auction, the government may use private placement to banks  or Bank Indonesia in the agreed amount. The price used in private placement will refer to the latest on issued by Indonesia Bond Pricing Agency (PHEI). Under such mechanism, fiscal deficit financing can be fulfilled.
4.   Implementation of quantitative easing policy of Rp503.8 trillion
Under the decision of the Board of Governors meeting in April 2020, policy easing adopted by Bank Indonesia among others includes quantitative easing. Until now, quantitative easing by Bank Indonesia has amounted to Rp503.8 trillion, consisting of:
a.    In January – April 2020, Rp386 trillion from SBN purchase in the secondary market of Rp166.2 trillion, bank’s term repo of Rp137.1 trillion, declining rupiah Reserve Requirements ratio (RR) in January and April 2020 of Rp53 trillion, and foreign currency swap of Rp29.7 trillion.
b.    In May 2020, Rp117.8 trillion from declining rupiah RR ratio of Rp102 trillion and non-application of additional reserve requirement ratio to meet Macroprudential Intermediation Ratio of Rp15.8 trillion.
Quantitative easing policy will create effective impacts on the real sector with the support of fiscal stimulus, among others through implementation of social safety net, industrial incentive including people’s business loans (KUR), and other social aid programs as well as credit restructuring support. 
5.   Bank Indonesia Peduli COVID-19 (Bank Indonesia Devotes to Fight COVID-19)
In solidarity with and care for people affected by COVID-19 and in support of COVID-19 pandemic management, Bank Indonesia (BI) implements a movement called “Gerakan BI Peduli COVID-19” or “Bank Indonesia Devotes to Fight COVID-19”. The movement serves as an initiative of the board of Governors and employees of BI who set aside some amount of their Lebaran allowance and salary for 6 (six) months from May until October 2020. In addition, the movement includes distribution of BI’s social support in Dedikasi untuk Negeri  (Dedication to the Nation) program and voluntary donation by employees from March 2020.
This movement is estimated to raise a total fund of Rp101.4 billion to be distributed through the Task Force for Acceleration of COVID-19 Handling, hospitals, and community.  The fund will be used among others to buy personal protective equipment (PPE), masks, ventilators, body temperature measurement instruments, vitamins, and basic food supplies. 
Bank Indonesia will continue to strengthen coordination with the Government and Indonesian Financial Services Authority (OJK) to carefully monitor the dynamics of COVID-19 transmission and the economic impact on Indonesia over time, including the coordinated policy measures required to maintain macroeconomic and financial system stability, as well as solid and resilient economic growth.
Head of Communication Department
Onny Widjanarko
Executive Director
Information on Bank Indonesia
Phone: 021-131, Email:

​Contact Center BICARA : 1500-131 e-mail :
Working hours: Monday to Friday, 08.00-16.00 West Indonesia Time
Halaman ini terakhir diperbarui 9/21/2020 8:58 PM
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