The role of the central bank is not only to promote or focus on the green transition, but to support the transition…
Badung, Bali (ANTARA) - The ASEAN Central Bank is playing an important role in supporting the green financial transition, Bank Indonesia (BI) Governor Perry Warjiyo said at the 2023 ASEAN high-level seminar on “Aligning Policies for Climate Transition.”

"The role of the central bank is not only to promote or focus on the green transition, but to support the transition, especially the green finance transition,” he observed in Badung District, Bali, on Thursday.

This step is necessary since several global initiatives have continued to run according to the green transition. In fact, governors of several of the world's central banks have continued to discuss greening the financial sector together.

The ASEAN Central Bank can support the green finance transition in various ways. For example, the support can be just as BI has done by issuing macro-prudential policies to support green and sustainable development, including incentives in the form of additional liquidity for banks providing financing for green projects, Warjiyo said.

BI has also issued a loan-to-value (LTV) ratio policy of 100 percent for banks financing green projects.

Warjiyo informed that BI is also providing technical assistance to and supporting the capacity-building of local governments through workshops on the preparation and financing of development projects.

"We are carrying out this step through our 46 branches throughout the country. We advise local governments on preparations that will be important for green projects," he said.

In line with BI's general policy, he informed that the central bank has also adopted a Sustainable and Responsible Investment (SRI) strategy.

In addition, BI's foreign exchange management is also focused on assets that are confirmed as green and sustainable finance.

"In this case, we also have a portfolio in the social sector and the sustainable use of sharia bonds or sukuk," Warjiyo said.

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Translator: Agatha Olivia, Cindy Frishanti Octavia
Editor: Rahmad Nasution
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