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BI: Quantitative Easing Will Impact if Fiscal Stimulus is Also Quickly Implemented

Jakarta, 29/04/2020 Ministry of Finance - Governor of Bank Indonesia (BI Governor) Perry Warjiyo said that the quantitative easing conducted by BI to banks will only have an impact on the economy if the fiscal stimulus carried out by the Ministry of Finance is also accelerated in the real sector.

"The faster the fiscal stimulus is being implemented, the more quantitative easing of BI to banks is felt by the real sector," he explained at the Latest Economic Development video conference in Jakarta, (29/04).

The total quantitative easing that had been released by BI from January-April 2020 was Rp386 trillion from the total Rp503.8 trillion. The Rp503.8 trillion figure is the amount of quantitative easing from January to April Rp386 trillion plus a reduction in the Statutory Reserves (GWM) of Rp117.8 trillion as of May 2020.

Therefore, the distribution of social assistance by the Ministry of Social Affairs and banking credit to MSMEs, for example, is also being carried out so that funds that have been injected by BI into banks through Government Bond (SBN) and Repo purchases can immediately be rolled out to the public to overcome the impact of COVID-19 on the economy.

In addition, he believes the government's need for fiscal financing through the issuance of Government Bond with 8.8% yields can meet the health costs of Rp70 trillion, social assistance as a Rp10 trillion Social Safety Net (JPS) and Rp70 trillion industry incentives. (nr / f)