Indonesia's Central Bank Bond Purchases for 2025

JAKARTA (Reuters) – Indonesia's central bank announced it will purchase 150 trillion rupiah (approximately $9.3 billion) worth of state bonds in the secondary market next year. This initiative aims to more than cover 100 trillion rupiah of maturing bonds bought during a COVID-era program, following an agreement with the government.

Background

Bank Indonesia (BI) previously acquired significant amounts of government bonds from 2020 to 2022. During this period, it also waived interest payments on certain bonds to support the government under a "burden sharing" agreement, which was designed to address expenses related to the COVID-19 pandemic.

According to the government's financial report, approximately 100 trillion rupiah of these bonds are set to mature in 2025.

Monetary Policy

Governor Perry Warjiyo confirmed at a press conference following BI's routine monetary policy review that BI's bond purchases will exceed the amount maturing under the burden-sharing agreement. He stated:
> "As part of monetary operation plans, the purchases can reach 150 trillion rupiah," adding that the final amount might be even greater.

Warjiyo emphasized that this plan aligns with the central bank's monetary operations goals, using bond purchases as a means to increase the money supply. He noted that monetary and fiscal policymakers are finalizing the details of this initiative and further clarification will follow.

Budget Context

New Indonesian President Prabowo Subianto has proposed a budget of 3,621.3 trillion rupiah for 2025, reflecting a 6% increase from the current year, with a forecasted budget deficit of 2.53% of GDP.

($1 = 16,085 rupiah)