TEMPO.CO, Jakarta - Bank Indonesia (BI) reported that it has purchased Government Bonds (SBN) worth Rp70.74 trillion as of March 18, 2025. BI Governor Perry Warjiyo explained that the central bank’s acquisition of these government debt securities is part of a market-supportive monetary operation. 

"As of March 18 this year, Bank Indonesia has acquired SBN totaling Rp70.74 trillion," Perry announced during a press conference following the March 2025 Board of Governors Meeting (RDG) at the Thamrin Building, Bank Indonesia, Central Jakarta, on Wednesday, March 19. 

He elaborated that the central bank purchased Rp47.31 trillion in SBN from the secondary market and Rp23.43 trillion from the primary market, including Treasury Bills (SPN) and sharia-compliant securities. According to Perry, this strategy aims to bolster rupiah exchange rate stability and meet inflation targets. 

Looking ahead, Perry noted that various financial instruments already issued will be leveraged to enhance Indonesia’s external economic resilience and improve the transmission of monetary policy. 

Previously, Bank Indonesia had outlined plans to buy SBN from the secondary market following an agreement with the Ministry of Finance. At the central bank’s monthly Board of Governors meeting on December 18, 2024, Perry stated that this step was integral to BI’s monetary operations, aimed at stabilizing the rupiah, particularly after the currency weakened to Rp16,000 per US dollar in December 2024. 

Perry disclosed that negotiations with the State Treasurer led to a deal: the Ministry of Finance would issue SBN in 2025, while BI would execute its monetary operation plans by purchasing SBN from the secondary market. 

For 2025, the central bank has set a target of not just Rp100 trillion but potentially up to Rp150 trillion in purchases. "It could even exceed that; we’ll discuss it later," Perry remarked at a recent BI press conference. 

Bright Institute economist Muhammad Andri Perdana characterized this approach as a form of quantitative easing, a monetary policy that increases the money supply. He cautioned that this decision carries risks, including potential inflation spikes and questions about BI’s credibility and independence. 

Andri likened BI’s current strategy to the burden-sharing mechanism used during the Covid-19 pandemic. However, he pointed out a key distinction: this time, BI is buying SBN from the secondary market, unlike the primary market purchases during burden-sharing. In effect, BI is directly injecting liquidity—essentially printing money. 

"Both methods carry significant risks, as they involve direct liquidity injections from the central bank rather than organic economic activity," Andri told Tempo on Thursday, December 26, 2024.

Ilona Estherina contributed to the article.

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