Bank Indonesia criticised after direct purchase of government debt

Bank Indonesia
Bank Indonesia
Photo: Christopher Jeffery

Indonesia’s central bank has been criticised for “partially financing deficits” after it bought government bonds in the primary market.

The government’s fiscal stimulus packages are driving the budget deficit higher at a time when the country faces lower growth.

Bank Indonesia bought 1.7 trillion rupiah ($108 million) of sharia sovereign bonds via an auction held by the government in late April, marking its first direct purchase of government debt. The move came amid rupiah depreciation

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