BANK Indonesia stated that the Bank Indonesia Rupiah Securities (SRBI) instrument will be maintained for quite a long time. This is because the instrument is considered to work effectively in supporting the transmission of monetary policy, deepening the money market, and the stability of the rupiah exchange rate.
“SRBI will be long lasting, but perhaps the variation of the strategy will be adjusted to the context of the challenges faced later,” said Head of the Financial Market Deepening Department of Bank Indonesia, Donny Hutabarat, in a media briefing, Jakarta, Tuesday (24/9).
He added that initially SRBI was issued by the central bank to support the monetary policy transition. Over time, the instrument can support efforts to deepen the financial market and prevent the rupiah from falling too deeply.
From the monetary policy transition side, for example, SRBI plays a role in maintaining the IndONIA level within the BI Rate range. IndONIA is an interest rate index for unsecured rupiah lending transactions conducted between banks for an overnight period in Indonesia.
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Meanwhile, in terms of financial market deepening, Donny continued, SRBI plays a very effective role. Because the transaction value of the instrument in the secondary market ranges from IDR 5 trillion to IDR 12 trillion per day. “So this is effective. So the point is the secondary market, if a bank has SRBI, it can be used to manage liquidity with efficient spreads, that is from the market deepening indicator,” he explained.
Meanwhile, in terms of rupiah exchange rate stability, SRBI has succeeded in attracting capital inflows. At least capital inflows through SRBI reached 27%, equivalent to Rp256 trillion of the total volume of the instrument. “Is this long lasting? We can say yes, because of the effectiveness it has achieved,” said Donny.
On the same occasion, BI Assistant Governor Erwin Haryono revealed that SRBI is an instrument in the money market used by the central bank to support monetary operations. It is used as a tool to manage liquidity that can be transacted and owned by non-banks in the secondary market.
“For now, at this time, it will still be used as an instrument. Like other central banks, we want to use SBN only, but yesterday there was an issue of supply, and to expand money market instruments, so far SRBI is still needed, unless in the future, SBN is sufficient, maybe SRBI is no longer needed,” said Erwin.
As of September 17, 2024, BI has issued SRBI with a total value of Rp918.42 trillion. In addition to SRBI, the central bank is also scheduled to issue Bank Indonesia Foreign Currency Securities (SVBI) and Bank Indonesia Foreign Currency Sukuk (SUVBI), which were sold for US$2.95 billion and US$280 million, respectively. (Mir/M-4)
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