Bank Indonesia (BI) has introduced a new instrument called Rupiah Securities (SRBI) as part of the pro-market monetary operation (OM) instruments, aiming to strengthen efforts in deepening the money market.

"In order to support attracting foreign capital inflows in the form of portfolio investment and optimize the State Securities (SBN) assets owned by Bank Indonesia as underlying," said Governor of Bank Indonesia, Perry Warjiyo, during a press conference following the BI board of governors' meeting in Jakarta, Thursday (24/8).

So, what is SRBI?

SRBI is a debt securities denominated in Rupiah issued by Bank Indonesia with a short-term maturity, using SBN owned by Bank Indonesia as the underlying asset.

SRBI is a contraction monetary operation instrument designed to manage liquidity, while also expected to support the development of the money market and stability of the Rupiah exchange rate, as it can be traded and owned by non-banks (residents and non-residents) in the secondary market.

Here are the characteristics of SRBI:

1. Uses SBN as the underlying asset
2. Maturity ranging from 1 week to 12 months
3. Issued without a certificate
4. Issued and traded with a discount system
5. Transferable
6. Can be owned by residents or non-residents in the secondary market.

The issuance of SRBI is conducted through auctions with commercial banks participating as conventional open market operation (OMO) participants, and SRBI can be transferred or traded in the secondary market. SRBI will be implemented starting from September 15, 2023, as a Rupiah contraction monetary operation instrument.

"In the initial stage, SRBI will be issued with tenors of 6, 9, 12 months, with schedules and auction results announced on the Bank Indonesia website," added Perry.