Bank Indonesia Defends Bond Purchases as Necessary to Support Liquidity

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JAKARTA, Investortrust.id — Bank Indonesia has defended its recent government bond purchases, asserting that the central bank’s intervention in the secondary market is a well-calculated step to support domestic banking liquidity and maintain financial stability.

Ramdan Denny Prakoso, Executive Director of BI's Communications Department, said the central bank’s decision to buy government securities (SBN) aligns with its broader strategy to ensure sufficient liquidity in the financial system.

“Our Governor Perry Warjiyo has already conveyed that Bank Indonesia has purchased more than Rp 90 trillion worth of SBN on the secondary market this year,” Ramdan said during a media briefing on macroprudential policy held at the central bank’s headquarters in Jakarta. “This directly supports banks’ liquidity management.”

Bank Indonesia (BI) has been conducting what it calls a “triple intervention” policy—targeting the foreign exchange market, bond market, and money market—to ease volatility and strengthen monetary transmission. The recent bond purchases are part of this broader framework.

Ramdan said BI is confident that its bond acquisition policy will enable banks to better distribute liquidity across the economy. He emphasized that the central bank had carefully assessed the implications of these actions, particularly their effects on liquidity and broader economic stability.

Interest Rates Remain Stable

Ramdan also noted that money market interest rates have remained stable and in line with the benchmark BI Rate, indicating that banks have so far managed liquidity effectively.

“We see that interest rates in the money market are relatively stable, showing no significant shocks in the domestic market,” he said.

Governor Perry Warjiyo previously reported that as of Monday, May 20, 2025, Bank Indonesia had acquired Rp 96.41 trillion ($5.98 billion) in government bonds year to date. This included Rp 64.99 trillion ($4.03 billion) purchased on the secondary market and Rp 31.42 trillion ($1.95 billion) bought on the primary market, primarily in Treasury bills and Islamic bonds.

“In the future, Bank Indonesia will continue to optimize pro-market monetary operations to enhance policy transmission, stabilize the rupiah, and achieve our inflation targets,” Perry said during a virtual press briefing following the central bank’s monthly policy meeting on Wednesday, May 21.