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Policy synergy to support national economic recovery: AMRO report 18th February 2021
According to AMRO’s report on recent economic developments in Indonesia, national economic activity has gradually turned around from a sharp contraction in the second quarter of 2020. (ANTARA/Handout-APEC Secretariat) Jakarta (ANTARA) - The economy of Indonesia remains resilient amid the COVID-19 pandemic, according to the
2020
Annual Consultation Report on Indonesia, published by the ASEAN+3 Macroeconomic Research Office (AMRO) and received here on Thursday.
A prompt recalibration of the policy mix and the enactment of large stimulus measures have provided timely support to affected households, businesses, and the financial sector, as well as safeguarded macroeconomic and financial stability, the report stated.
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In December 2020, Bank Indonesia released a Blueprint for Money Market Development 2025. The goal of this document is to set the ground rules for developing a more active money market in Indonesia, part of a larger and longer-term effort to deepen Indonesia’s capital markets. An op-ed in the Jakarta Post, penned by someone in Bank Indonesia’s legal affairs division, touted the benefits of the plan: “Consisting of the rupiah market, the foreign exchange market and their derivative markets, the money market supplies liquidity.”
Liquidity is the key. The defining feature of a money market is the trading of highly liquid, short-term financial instruments – repurchase agreements, three-month government bonds, currency swaps, commercial paper, and the like. According to Bank Indonesia, assets traded on its money market will have a maximum term of one year, and most will be much shorter.