Relation with other Institutions - Bank Sentral Republik Indonesia
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September 26, 2018

RELATION WITH OTHER INSTITUTIONS

Seen from the constitution of the Republic of Indonesia, BI position as an independent state agency is not parallel with the other supreme state agencies such as the Parliament (DPR), Financial Audit Board (BPK), and the Supreme Court (MA). BI position is also not the same as Ministries since BI position is outside the government. The special status and position is required so that BI can carry out its role and function as the authority in monetary, macroprudential, payment system, and Rupiah management more effectively and efficiently. Although BI has a position as an independent state agency, in carrying out its duties, BI has a good working relationship and coordination with DPR, BPK, the Government and other parties.

In its relation with the President and DPR, BI in each beginning of the budget year shall submit written information concerning the evaluation of monetary policy implementation and monetary policy plan for the future; in particular to DPR, the authority and duty implementation, each quarter and at any time if requested by DPR. Besides, BI shall submit annual budget realization and plan to the Government and DPR. In its relation with BPK, BI must submit annual financial statements to BPK. Further information can be obtained by visiting information in Supervision to Bank Indonesia .

:: BI relationship with the Government: Financial Relation

With regard to financial relation with the Government, Bank Indonesia shall provide assistance in issuing and placing state debt securities to finance the State Budget (Anggaran Pendapatan dan Belanja-APBN) with no permission to purchase the state debt securities for self.

Bank Indonesia also acts as the Government Treasurer administering the Government account in Bank Indonesia, and on request of the Government can accept foreign loans for and on behalf of the Indonesian Government.

Nevertheless, in order that the duty implementation of Bank Indonesia is truly focused and in order that the effectiveness of the monetary control is not disrupted, the credit extension to the Government to resolve the deficit spending – which all this time is conducted by Bank Indonesia based on the old legislation – currently cannot be carried out by Bank Indonesia anymore.

:: BI Relationship with the Government: Independence in Interdependence

Although Bank Indonesia is an independent state agency, a consultative coordination with the Government is still required, since the duties of Bank Indonesia are integral parts of the national economic policies as a whole.

Coordination between Bank Indonesia and the Government is required in the ministerial meeting that discusses the issues of economic, banking and financial related to the duties of Bank Indonesia. In the ministerial meetings the Government can ask for Bank Indonesia opinions.

Apart from that, Bank Indonesia can also provide inputs, opinions and considerations to the Government concerning the Draft of the State Budget (RAPBN) and other policies related to its duties and authorities.

On the other hand, the Government can also attend the Board of Governors of Bank Indonesia with the right to say its opinion but not the right to vote. Therefore, the implementation of independence is highly influenced by the solid but proportional working relationship between Bank Indonesia on one side and the Government and other related institutions on the other side, while still maintaining the basis of the respective division of duties and authorities.

:: BI Cooperation with Other Institutions

Realizing the important supports from various parties for the success of its duties, BI constantly works in cooperation and coordination with various state agencies and other community elements. Some of these cooperations are embodied in a Memorandum of Understanding (MoU), Joint Decision (Surat Keputusan Bersama-SKB), and agreements, which are intended to create synergies and clarities of division of duties inter institutions as well as to encourage an effective law enforcement.

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