Bank Indonesia has also conducted a quantitative easing policy to inject liquidity in the economy, which from the beginning of the year until the end of September 2020 had amounted to IDR666 trillion. Perppu No. 1/2020 allows BI to purchase SBN instruments in the primary market through private placement, where previously BI could only buy SBN instruments in the secondary market. On 6 July 2020, BI and the government announced a burden-sharing scheme where BI will help partially to finance the government budget deficit by buying the SBN instruments and bearing some portion of interest payments for them. Based on the case study above, examine reason that the the Bank Indonesia (BI) decided to take such action.

Bank Indonesia has also conducted a quantitative easing policy to inject liquidity in the economy, which from the beginning of the year until the end of September 2020 had amounted to IDR666 trillion. Perppu No. 1/2020 allows BI to purchase SBN instruments in the primary market through private placement, where previously BI could only buy SBN instruments in the secondary market. On 6 July 2020, BI and the government announced a burden-sharing scheme where BI will help partially to finance the government budget deficit by buying the SBN instruments and bearing some portion of interest payments for them. Based on the case study above, examine reason that the the Bank Indonesia (BI) decided to take such action.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 6E

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