Moody’s: Bank Indonesia’s Credibility Could be Impacted due to Indonesia’s Burden-Sharing Scheme

Bank Indonesia (BI) and the Government of Indonesia have agreed to an IDR 574.59 trillion (USD 39.7 billion) burden-sharing scheme, which will see BI purchasing IDR 397.5 trillion in state securities at a maximum coupon rate of 4.25% corresponding with BI’s benchmark rate. BI will subsequently return the yield to the Government in full on the day it is paid.

In addition, BI will support the Government in covering the debt costs related to the Government’s stimulus package for small and medium enterprises, as well as large businesses, estimated to generate IDR 177 trillion in debt.

According to Anushka Shah, Vice President at Moody’s Investors Services (Moody’...