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(Bloomberg) -- Indonesia's central bank is on track to issue its own digital currency for banks to use, while considering ways to ensure it would be exchangeable across borders. The central bank will distribute the digital currency to large banks and payment service companies to sell to smaller banks for various retail transactions. [Extracted from the article]

Bank Indonesia's debut auction of dollar securities was successful, with the central bank selling $236.5 million in FX-denominated securities, surpassing its $200 million target. The auction attracted foreign inflows that are expected to support the rupiah. The rupiah has strengthened by nearly 3% this month, and there has been renewed interest in the central bank's rupiah-denominated securities as well. Bank Indonesia plans to continue using dollar notes as a tool to attract foreign inflows and stabilize the currency without resorting to interest-rate hikes or market intervention. [Extracted from the article]

Yields on rupiah sukuk due 2019 slid 39 basis points in the period, compared with 26 basis points for equivalent paper in Malaysia. While Indonesia and Malaysia have both provided stimulus through infrastructure spending programs, the latter has been dogged by a political scandal involving Prime Minister Najib Razak and a bond default at a state investment company, 1Malaysia Development Bhd. [Extracted from the article]

Bank Indonesia's first auction of its dollar securities, known as SVBI, was oversubscribed, with the central bank selling $236.5 million, exceeding its $200 million target. This move is aimed at attracting foreign inflows to support the rupiah. The auction comes at a time when the dollar is weakening and the rupiah has rallied nearly 3% this month. Bank Indonesia plans to use both SVBI and its rupiah-denominated securities, SRBI, to stabilize the currency without resorting to interest-rate hikes or market intervention. However, it may take some time to assess the effectiveness of the SVBI issuances. [Extracted from the article]

(Bloomberg) -- Bank Indonesia is undertaking on its own version of Operation Twist, selling short-term notes and buying up longer ones, which it says will shore up the rupiah by bringing in foreign inflows. Indonesia's central bank will sell off shorter-tenor government bonds to boost their yield differential over US rates and attract foreign inflows that would help underpin the currency, Governor Perry Warjiyo said in an investor call on Tuesday after delivering a surprise interest-rate hike. [Extracted from the article]

(Bloomberg) -- Bank Indonesia is selling government bond holdings in the secondary market, ratcheting up its efforts to mop up excess liquidity in the financial system. The bond sales mark the first time Bank Indonesia is selling such holdings since taking on an ultra-easy monetary policy during the pandemic, which resulted in 150 basis points of interest-rate cuts and more than 985 trillion rupiah in debt purchases by the end of 2021. [Extracted from the article]

A proposed omnibus financial sector reform bill would require Bank Indonesia to take into account the government's broad economic strategy when making monetary policy decisions, according to a copy of the bill reviewed by Bloomberg. (Bloomberg) -- Indonesia is pursuing another attempt at increasing government influence in the decision-making and operations of its central bank, as well as expanding its ability to fund public debt, according to a draft legislation to be discussed in parliament. [Extracted from the article]

"The independence of the central bank is very important in maintaining a prudent, credible and effective macro policy framework to achieve the goal of safeguarding the economy together with the government", the bill read, adding that monetary policy must be kept "objective and free from political interests." (Bloomberg) -- Indonesia is pursuing another attempt at increasing government influence in the decision-making and operations of its central bank, as well as expanding its ability to fund public debt, according to a draft legislation to be discussed in parliament. [Extracted from the article]

(Bloomberg) -- Bank Indonesia's unprecedented move to buy about $27 billion in bonds directly from the government may prove to be an exception rather than the norm in emerging markets. Three weeks on, currency and bond markets appear to have given Indonesia a pass on its direct financing foray as the government prepares for a budget deficit of more than 5% of gross domestic product next year. [Extracted from the article]

(Bloomberg) -- Bank Indonesia's unprecedented move to buy about $27 billion in bonds directly from the government may prove to be an exception rather than the norm in emerging markets. Read more: Emerging Economies Face Real Risk of "Submerging", Tharman Says In Argentina, which defaulted on its debt earlier this year, the central bank has transferred 1.3 trillion pesos ($18 billion) to the Treasury since the lockdown was announced on March 19. [Extracted from the article]