Monday, 13 July 2020 | 16:09 WIB

Bank Indonesia Discloses Further Measures to Curb Coronavirus Impact

Perry Warjiyo, Governor of Bank Indonesia (special)

JAKARTA, NETRALNEWS.COM - Governor of Bank Indonesia Perry Warjiyo says that there have been positive developments from the joint steps in developed countries to overcome the impact of COVID-19 coronavirus on the aspects of humanity, the financial sector, and the economic sector.

In an official statement on Thursday (3/26/2020), he said the steps taken by the senates of the United States (US) and Germany in approving the fiscal stimulus proposed by their respective governments were good news in the efforts to reduce the negative impact of the outbreak.

While from the monetary side, the Fed has lowered the Fed Fund Rate to almost 0%, adding liquidity injection to the money market, as well as buying securities. At the same time, the ECB is injecting liquidity and relaxing policies.

"This has alleviated panic in the global markets, so that financial indicators, including global stocks, have increased in response to these policies," Perry explained.

As a result, these conditions also created positive sentiment to the Indonesian financial market. The rupiah has strengthened and is moving stable. The value of the rupiah rose today, and was traded at around IDR16,250. Likewise, the Jakarta Composite Index (JCI) is also moving in a positive direction again.

"We note that foreign investors are starting to buy securities in the secondary market, and the outflow position is declining," Perry said.

In order to strengthen coordination and various policy steps that taken previously, Bank Indonesia has taken several further policy steps to maintain monetary and financial market stability, including mitigating COVID-19 risk, relaxation of provisions for foreign investors related to hedging, and net foreign exchange (forex) position.

There is also the using of domestic Rupiah account (Vostro) for foreign investors as an underlying transaction in DNDF transactions, so as to encourage more hedging of Rupiah ownership in Indonesia, which has been in effect since March 19, 2020;

Furthermore, the recording of DNDF Transactions in the Net Open Position (NOP), where DNDF transactions are calculated in the Bank's NOP and reported to BI, so that banks will be more lax in their transactions on the forex market, from March 20, 2020.

Meanwhile, said Perry, in supporting and following the Government's call to mitigate the spread of COVID-19, BI carried out the following steps:

First, BI has coordinated with the Indonesia Financial Services Authority (OJK) and the industry to determine adjustments to the schedule of operational activities and public services that are in effect from 30 March - 29 May 2020.

In terms of cash, BI ensures that Rupiah cash money distributed to the public is Rupiah cash money that has been through a special processing to minimize the spreading of COVID-19.

BI cooperates with banks to ensure that the fulfillment of cash needs is done in front loading. Please note that the availability of cash reaches 6 (six) months for the money supply needs.

From the non-cash side, BI and the industry are making efforts to increase non-cash transactions. The use of non-cash through electronic money, mobile banking, internet banking and QRIS, supports the WFH program and social distancing efforts.

These include through the extension of the validity period of the QRIS MDR, specifically for micro businesses, by 0% which is valid until 30 September 2020 and decreases in the cost of SKNBI that will be effective from 1 April 2020 to 31 December 2020.

"BI will continue to encourage the use of non-cash payments and support government programs in channeling social assistance funds through non-cash payments," he concluded.