Peran Bank Sentral

Summary

This video provides an in-depth explanation of the role of Bank Indonesia as the central bank and its responsibility in executing monetary policy to stabilize the Indonesian Rupiah. The discussion covers tools like open market operations, standing facilities, and reverse repos to manage liquidity and inflation. The video also explores the concept of liquidity injection and absorption through mechanisms such as deposit facilities and the adjustment of the minimum reserve requirement. Additionally, it touches upon measures to prevent bank failure and the role of Bank Indonesia as the lender of last resort in times of financial distress.

Takeaways

• 😀 The central bank of Indonesia, Bank Indonesia (BI), is responsible for implementing monetary policy in the country.
• 😀 Monetary policy aims to achieve the stability of the rupiah's value, particularly in terms of maintaining price stability and exchange rate stability.
• 😀 Bank Indonesia uses monetary operations to manage liquidity, interest rates, inflation, and the money supply in the economy.
• 😀 There are two main types of monetary operations conducted by Bank Indonesia: open market operations and standing facilities.
• 😀 Open market operations are used to absorb liquidity, typically through the issuance of Bank Indonesia Certificates (SBI) or the sale of government securities.
• 😀 Injections of liquidity can occur via reverse repo agreements, the purchase of government securities, and foreign exchange transactions.
• 😀 Standing facilities are used to either absorb liquidity (through deposit facilities) or inject liquidity (through lending facilities).
• 😀 The reserve requirement, or minimum reserve ratio (GWM), can be adjusted by Bank Indonesia to influence the amount of money circulating in the economy.
• 😀 Bank Indonesia can decrease the GWM to inject liquidity into the economy, or increase it to absorb liquidity and control inflation.
• 😀 In cases of a bank failure or panic, Bank Indonesia can provide emergency lending, enforce capital requirements, and ensure depositor protection through guarantees from the Deposit Insurance Corporation (LPS).

Q & A

What is the primary function of Bank Indonesia as a central bank?

The primary function of Bank Indonesia as the central bank is to implement monetary policy to achieve stability in the value of the Rupiah, particularly in terms of maintaining stable prices and controlling inflation and the exchange rate.

What is monetary policy and why is it important for the Indonesian economy?

Monetary policy refers to the actions taken by a central bank to manage the money supply, interest rates, and inflation to achieve economic stability. In Indonesia, Bank Indonesia implements monetary policy to ensure price stability and the proper exchange rate of the Rupiah.

What are the two main types of monetary operations conducted by Bank Indonesia?

The two main types of monetary operations conducted by Bank Indonesia are Open Market Operations (OMO) and Standing Facilities.

What is the purpose of Open Market Operations (OMO)?

Open Market Operations are conducted by Bank Indonesia to either absorb liquidity from the market (to control inflation) or inject liquidity (to stimulate economic activity). This is done through transactions like buying or selling government securities and foreign exchange.

How does Bank Indonesia use Standing Facilities in its monetary policy?

Standing Facilities are used by Bank Indonesia to either provide or absorb liquidity from the banking system. The facilities include deposit facilities (for absorbing liquidity) and lending facilities (for injecting liquidity).

What role do certificates like SBI and SBN play in Bank Indonesia's monetary operations?

SBI (Bank Indonesia Certificates) and SBN (State Bonds) are used in Open Market Operations to manage liquidity. SBI is sold to absorb liquidity, while SBN can be purchased to inject liquidity into the market.

What is a 'repo' or repurchase agreement in the context of monetary policy?

A repurchase agreement (repo) is a transaction in which Bank Indonesia sells securities to a participant with the agreement to buy them back later. This helps absorb liquidity. A reverse repo is the opposite, where Bank Indonesia buys securities from a participant, injecting liquidity into the market.

How does Bank Indonesia use the Reserve Requirement (GWM) in managing the money supply?

Bank Indonesia regulates the amount of money circulating in the economy by setting the Reserve Requirement (GWM), which is the percentage of deposits that banks must hold in reserve. By increasing GWM, Bank Indonesia can absorb excess liquidity, and by lowering it, they can inject more liquidity into the economy.

What is the impact of lowering the Reserve Requirement (GWM) on the economy?

Lowering the Reserve Requirement allows banks to lend more money, thereby increasing the money supply in the economy. This can stimulate economic growth, especially during periods of economic slowdown.

How does Bank Indonesia respond to the potential risk of a bank failure or a bank run?

To prevent bank failure or a bank run, Bank Indonesia provides mechanisms like guaranteeing certain deposits through LPS (Indonesian Deposit Insurance Corporation), adjusting the Reserve Requirement, and acting as the lender of last resort by offering emergency loans to troubled banks.