Bank Indonesia issued Board Member of Governors Regulation No. 22/5/PADG/2020
on Auction of Government Debt Securities and/or Government Islamic
Securities in the Primary Market to Maintain State Financial Management
Sustainability as Implementation of Government Regulation in Lieu of Law
Number 1 of 2020 on State Financial Policy and Stability of Financial
Systems for the Management of Corona Virus Disease 2019 (Covid-19)
and/or Encounter the Threat to National Economy and/or Stability of
Financial Systems. The regulation starts to take effect on 20 April
2020.
The regulation serves as a follow-up to Government
Regulation in Lieu of Law Number 1 of 2020, granting authority to Bank
Indonesia among others to purchase Government Debt Securities (SUN)
and/or Government Islamic Securities (SBSN) in the primary market . It
is necessary as a funding source for the government to recover the
national economy including maintaining state financial management
sustainability including SUN and/or SBSN issued in response to COVID-19
pandemic. Purchase of SUN and/or SBSN in the primary market is based on
principle that Bank Indonesia is a last resort if the market capacity is
unable to purchase them and/or result in high yield increase.
Further, this regulation specifies the following:
- Bank Indonesia holds auction of SUN
and/or SBSN and auction of additional SUN and/or SBSN for long-term SUN
and/or SBSN in the primary market as a follow-up to the implementation
of Government Regulation in Lieu of Law Number 1 of 2020.
- Provisions for offer quote and
participants of auction of SUN and/or SBSN and auction of additional SUN
and/or SBSN refer to the applicable Finance Minister Regulation on
auction of SUN and/or SBSN in the domestic primary market.
- Bank Indonesia may quote an offer to
purchase long-term SUN and/or SBSN in auction of SUN and/or SBSN and
auction of additional SUN and/or SBSN in the following manners:
a. directly without using the main dealer and/or SBSN main dealer;
b. non-competitive bid.
- Implementation of auction of SUN and/or
SBSN and auction of additional SUN and/or SBSN refer to the applicable
Bank Indonesia provisions for auction of Government securities in the
primary market provided that they are not in contravention of this
regulation.
Bank Indonesia will consistently coordinate with
the Government, Indonesia Financial Services Authority (OJK), and the
relevant authority to monitor COVID-19 pandemic developments in order to
take policy measures to mitigate and reduce the impacts on the national
economy.
Head of Communication Department
Onny Widjanarko
Executive Director
Information on Bank Indonesia
Phone. 021-131, Email : bicara@bi.go.id
