Bond-buying added to Bank Indonesia in law overhaul

Bloomberg

Indonesia is one step closer to requiring the central bank to come to the government’s aid through crisis bond-buying, while dropping earlier proposals to expand the monetary
authority’s role.
A parliament commission has approved a draft of the financial sector omnibus law that retained a provision calling on Bank Indonesia (BI) to undertake debt monetisation in times of crisis. An earlier version sought to add job creation and economic growth to BI’s current mission of maintaining rupiah stability.
The central bank’s mandate is to “achieve rupiah stability, maintain payment system
stability, and participate in maintaining financial system stability in order to support sustainable economic growth,” according to the most recent version reviewed by Bloomberg.
The bill was passed by parliament’s finance commission and will be debated at a plenary session next week. “Without financial sector reform, Indonesia will continue to depend on foreign capital for investment needs and economic activity,” said Finance Minister Sri Mulyani Indrawati.