"The decision is consistent with the need to maintain stability of the rupiah exchange rate against a backdrop of projected low inflation," Head of the BI Communication Department Onny Widjanarko noted in a statement in Jakarta, Friday.
BI is focusing on the quantity channel by offering liquidity to encourage economic recovery during the COVID-19 pandemic, including its support for the government in terms of expediting realization of the state budget in 2020.
Furthermore, BI is implementing measures encompassing maintaining the rupiah exchange rate stabilization policy in accordance with the currency's fundamental value and market mechanisms; strengthening the monetary operations strategy to boost transmission mechanism of the current monetary policy stance; extending the 50bps lower rupiah reserve requirements as an incentive for banks disbursing loans to small and medium enterprises (SMEs) and for export-import activities as well as to non-SMEs operating in priority sectors as stipulated in the national economic recovery program, from December 31, 2020, earlier, until June 30, 2021.
Expediting development of money market instruments to support corporate and SME financing in line with the national economic recovery program and expanding QRIS acceptance in order to bolster economic recovery and accelerate SME development by extending the 0% Merchant Discount Rate (MDR) for micro-businesses from earlier September 30, 2020, until December 31, 2020.
BI will continue to implement necessary follow-up policy measures to support the national economic recovery program by observing global economic and financial market dynamics as well as COVID-19 transmission and impact on the economic outlook for Indonesia over time.
Close policy coordination with the government and Financial System Stability Committee will constantly be boosted to maintain macroeconomic and financial system stability while accelerating national economic recovery.
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