Placement of Government Funds Not Subject to Market Rates

By Editorial Team 03/06/2020
Summary

The Financial Services Authority (OJK) chairman Wimboh Santoso said the placement of government funds as emergency liquidity assistance in banks would get special interest, which is lower than the interest in the market (market rate). This policy was taken so that emergency liquidity assistance with low-interest rates could help the liquidity of the implementing banks that carry out credit restructuring.

Wimboh said that participating banks channeling emergency liquidity assistance would still receive a margin in the form of risk-adjusted return. "Participating banks will also use rules that can mitigate existing risks. This practice is already on the market. We will monitor it," he said in a virtual press conference after a limited meeting to establish a national economic recovery program and change the posture of the 2020 state budget in Jakarta on Wednesday (6/3).

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