BI Ramps Up Government Bond Purchases to Defend Rupiah and Support Liquidity

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JAKARTA, Investortrust.id – Bank Indonesia has reaffirmed its commitment to supporting rupiah stability and ensuring ample liquidity by continuing to purchase government bonds from the secondary market.

The central bank has so far acquired Rp 144.9 trillion ($8.9 billion) in sovereign bonds (Surat Berharga Negara or SBN) this year through both primary and secondary markets, according to Governor Perry Warjiyo. Of that amount, Rp 102.58 trillion ($6.3 billion) came from the secondary market and Rp 42.32 trillion ($2.6 billion) from the primary market, including both conventional and sharia Treasury bills.

Speaking at a media briefing in Jakarta on Thursday, Head of the Monetary Management and Securities Assets Department (DPMA) Erwin Gunawan Hutapea said the bond purchases serve a dual function: injecting liquidity into financial markets and supporting the exchange rate.

“Bank Indonesia will continue to buy SBN through both instruments — to ensure sufficient liquidity in the market and to stabilize the rupiah,” Erwin said. However, he declined to disclose the size of future purchases, saying that would be announced by Governor Perry Warjiyo at an appropriate time.

“Regarding the next steps, please wait for the Governor’s announcement. We’re not in a position to disclose BI’s detailed actions just yet,” Erwin added.

The central bank's bond-buying initiative aligns with its broader strategy of market-based monetary operations, which Perry emphasized during the central bank’s board of governors meeting held online on Wednesday.

“Going forward, Bank Indonesia will continue to optimize pro-market monetary operations to ensure sufficient liquidity and strengthen the transmission of monetary policy in achieving inflation targets and maintaining exchange rate stability,” Perry said.

Earlier this week, Bank Indonesia cut its benchmark interest rate to 5.25%, aiming to boost economic momentum while maintaining price and currency stability.