Bank Indonesia Regulation Number 23/18/PBI/2021 on Monetary Control

BANK INDONESIA REGULATION
NUMBER 23/18/PBI/2021
ON
MONETARY CONTROL
BY THE BLESSINGS OF THE ALMIGHTY GOD GOVERNOR OF BANK INDONESIA, Considering : a. that to achieve and maintain rupiah stability, Bank Indonesia needs to establish and implement monetary policy applied through determination of monetary targets by observing inflation rate and monetary control targets; b. that to implement the monetary control as referred to in point a, it is necessary to regulate monetary control, primarily a comprehensive regulation including all monetary control aspects in the money market;
c. that based on the foregoing considerations as referred to in
point a and point b, it is necessary to establish Bank Indonesia Regulation on Monetary Control; Observing : Law Number 23 of 1999 on Bank Indonesia (State Gazette of the Republic of Indonesia of 1999 Number 66, Supplement to State Gazette of the Republic of Indonesia Number 3843) as amended several times and last by Law Number 6 of 2009 on Establishment of Government Regulation in Lieu of Law Number 2 of 2008 on the Second Amendment to Law Number 23 of 1999 on Bank Indonesia as a Law (State Gazette of the

Republic of Indonesia of 2009 Number 7, Supplement to State Gazette of the Republic of Indonesia Number 4962); HAS DECIDED:
To establish : BANK INDONESIA REGULATION ON MONETARY CONTROL.
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Regulation:

1. Monetary Control means Bank Indonesia’s measure to
   perform its duty in establishing and implementing monetary policy.
2. Money Market means part of financial system related to
   issuance and trade of financial instruments termed not more than 1 (one) year, lending-borrowing or funding, currency exchange, derivative transactions of exchange rate and interest rate, and other transactions, in rupiah or foreign currency.
3. Monetary Control in Money Market means implementation
   of monetary policy through Bank Indonesia’s interactions with market participants in Money Market.
   CHAPTER II
   OBJECTIVE
   Article 2
   Bank Indonesia conducts Monetary Control to achieve and maintain rupiah stability.
   CHAPTER III
   SCOPE
   Article 3
   (1) Scope of Monetary Control includes:
   a. Monetary Control in the Money Market;

b. Money Market development; and
c. other Monetary Control required for implementation
of monetary policy.
(2) The Monetary Control in the Money Market as referred to in paragraph (1) point a includes:
a. interest rate management; b. exchange rate management; and
c. liquidity management.
(3) The Money Market development as referred to in paragraph (1) point b is implemented through:
a. regulation; b. license; and
c. supervision and imposition of sanctions,
in the Money Market.
(4) Provisions for the Money Market development as referred to in paragraph (1) point b and other Monetary Control required for implementation of monetary policy as referred to in paragraph (1) point c are stipulated in Bank Indonesia Regulation.
Article 4
The Monetary Control as referred to in Article 3 may be conducted under sharia principles.
CHAPTER IV
MONETARY CONTROL IN THE MONEY MARKET
Part One
General
Article 5
(1) The Monetary Control in the Money Market as referred to in Article 3 paragraph (2) is conducted through:
a. transaction execution; b. regulation;
c. license;
d. monitoring;

e. supervision; and f. sanction imposition.
(2) The Monetary Control in the Money Market as referred to in Article 3 paragraph (2) consists of:
a. transactions in Monetary Control in the Money Market; b. participation and transaction participants in Monetary Control in the Money Market;
c. the price determined and/or the reference price used
in Monetary Control in the Money Market; d. facilities used in Monetary Control in the Money Market; and/or e. other aspects determined by Bank Indonesia.
Article 6
The Monetary Control in the Money Market as referred to in
Article 3 paragraph (1) point a is conducted in an integrated
manner with the Money Market development as referred to in
Article 3 paragraph (1) point b.
Part Two
Transactions in Monetary Control in the Money Market
Article 7
(1) Transactions in Monetary Control in the Money Market as referred to in Article 5 paragraph (2) point a consists of:
a. monetary operation; b. hedging transactions to Bank Indonesia;
c. bank’s transactions with Bank Indonesia as a further
action to the implementation of international financial cooperation agreement between Bank Indonesia and the central banks of partner countries or international institutions; and d. other transactions related to Monetary Control in the Money Market determined by Bank Indonesia.

(2) In addition to the transactions as referred to in paragraph (1), transactions of Monetary Control in the Money Market may be conducted by:
a. issuance of instruments in Monetary Control in the Money Market; and b. sale and purchase of financial instruments with terms of more than 1 (one) year.
Article 8
(1) The transactions of Monetary Control in the Money Market as referred to in Article 7 may be conducted under sharia principles. (2) Fulfillment of the sharia principles as referred to in paragraph (1) is stated in the form of fatwa and/or sharia compliance statement by the competent authority to issue fatwa and/or sharia compliance statement.
Article 9
Bank Indonesia determines the characteristics, implementation, and settlement of transactions of Monetary Control in the Money Market as referred to in Article 7.
Article 10
The transactions of Monetary Control in the Money Market as referred to in Article 7 are conducted in accordance with the provisions of Bank Indonesia Regulation.
Part Three
Participation and Transaction Participants in Monetary Control in the Money Market
Article 11
Bank Indonesia determines the participation and transaction participants in Monetary Control in the Money Market as referred to in Article 5 paragraph (2) point b.

Article 12
Participants and transaction participants in Monetary Control in the Money Market shall comply with Bank Indonesia Regulation on monetary control in the money market.
Article 13
Participation and transaction participants in Monetary Control in the Money Market are conducted in accordance with the provisions of Bank Indonesia Regulation.
Part Four
Price and Price Reference in Monetary Control in the Money Market
Article 14
Bank Indonesia determines the price and/or price reference used in Monetary Control in the Money Market as referred to in
Article 5 paragraph (2) point c.
Article 15
The use of price and/or price reference as referred to in Article 14 are conducted in accordance with the provisions of Bank Indonesia Regulation.
Part Five
Facilities Used in Monetary Control in the Money Market
Article 16
Bank Indonesia determines the facilities used in Monetary Control in the Money Market as referred to in Article 5 paragraph (2) point d which consist of:
a. facilities used in implementation of transactions in Monetary Control in the Money Market (trading platform); b. facilities used in settlements of transactions in Monetary Control in the Money Market (settlement platform);

c. facilities used in monitoring of Monetary Control in the
Money Market; and d. other facilities.
Article 17
The use of the facilities in Monetary Control in the Money Market as referred to in Article 16 is conducted in accordance with the provisions of Bank Indonesia Regulation.
CHAPTER V
MONITORING IN MONETARY CONTROL
IN THE MONEY MARKET
Article 18
In Monetary Control in the Money Market, Bank Indonesia conducts monitoring of:
a. Money Market; and b. financial market development.
Article 19
The Money Market monitoring as referred to in Article 18 point a is conducted in accordance with the provisions of Bank Indonesia Regulation.
CHAPTER VI
SUPERVISION
Article 20
(1) Bank Indonesia conducts supervision of Monetary Control in the Money Market. (2) The supervision as referred to in paragraph (1) is conducted through:
a. indirect supervision; and/or b. examination.

Article 21
In conducting the supervision as referred to in Article 20, Bank Indonesia may request from participants and/or transaction participants in Monetary Control in the Money Market the required data, information, and details.
Article 22
The supervision of Monetary Control in the Money Market as referred to in Article 20 is conducted in accordance with the provisions of Bank Indonesia Regulation.
CHAPTER VII
COORDINATION
Article 23
Bank Indonesia may coordinate with authorities, institutions, agencies, and/or other parties in supporting Monetary Control in the Money Market.
CHAPTER VIII
ADMINISTRATIVE SANCTIONS
Article 24
Bank Indonesia imposes administrative sanctions to participants and transaction participants in Monetary Control in the Money Market against any breach of the obligations as referred to in Article 12.
Article 25
Imposition of the administrative sanctions in Monetary Control in the Money Market as referred to in Article 24 is conducted in accordance with the provisions of Bank Indonesia Regulation.

CHAPTER IX
CLOSING PROVISIONS
Article 26
This Bank Indonesia Regulation comes into force on 31 December 2021. In order that every person may know hereof, it is ordered to promulgated this Bank Indonesia Regulation by its placement in State Gazette of the Republic of Indonesia. Issued in Jakarta on 28 December 2021 GOVERNOR OF BANK INDONESIA, PERRY WARJIYO Promulgated in Jakarta on 28 December 2021

MINISTER OF LAW AND HUMAN RIGHSTS REPUBLIC OF INDONESIA, YASONNA H. LAOLY STATE GAZETTE OF THE REPUBLIC OF INDONESIA OF 2021 NUMBER 282

ELUCIDATION
OF
BANK INDONESIA REGULATION
NUMBER 23/18/PBI/2021
ON
MONETARY CONTROL
I. GENERAL
Bank Indonesia has an objective to achieve and maintain rupiah stability. To achieve the objective, Bank Indonesia determines and implements monetary policy. Further, to perform the duty Bank Indonesia is authorized to set monetary targets and conduct Monetary Control by implementing, including but not limited to, open market operation in rupiah and foreign exchange money market, determinining discount rate, determinining reserve requirement, and lending-borrowing or funding regulation. The Monetary Control is conducted among others in Money Market in an integrated manner and in line with Money Market development by Bank Indonesia. Further, to establish a comprehensive regulation which includes all aspects of Monetary Control in Money Market supporting economic development, it is necessary to establish Bank Indonesia Regulation on Monetary Control.
II. ARTICLE BY ARTICLE
Article 1
Sufficiently clear.

Article 2
Sufficiently clear.
Article 3
Paragraph (1)
Point a
The term “Monetary Control in Money Market” among others are open market operation in rupiah and foreign exchange money market. Point b Money Market development includes regulation, license, and supervision as well as imposition of sanctions in Money Market related to the activities between participants in Money Market. Point c The term “other Monetary Control required for implementation of monetary policy” among others are determinining discount rate, determinining reserve requirement, and regulation of lending-borrowing or funding for implementation of monetary policy. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.
Article 4
Sufficiently clear.
Article 5
Paragraph (1)
Point a
The term “transaction execution” means transactions conducted by Bank Indonesia with participants and/or transaction participants in Money Market.

Point b
Sufficiently clear.
Point c
Sufficiently clear.
Point d
Sufficiently clear.
Point e
Sufficiently clear.
Point f
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Article 6
Sufficiently clear.
Article 7
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Point a
Sufficiently clear.
Point b
The term “financial instruments with terms of more than 1 (one) year” among others are sovereign securities with terms of more than 1 (one) year. Sovereign securities include:

1. sovereign debt securities as referred to in the Law on
   sovereign debt securities; and
2. sharia sovereign securities as referred to in the Law on
   sharia sovereign securities.
   Article 8
   Sufficiently clear.
   Article 9
   Sufficiently clear.

Article 10
Sufficiently clear.
Article 11
Sufficiently clear.
Article 12
Sufficiently clear.
Article 13
Sufficiently clear.
Article 14
The term “price” among others are exchange rate, interest rate, premium, discount, yield, haircut, including pricing method. The term “price reference” among others are exchange rate reference and securities price reference.
Article 15
Sufficiently clear.
Article 16
Point a
Sufficiently clear.
Point b
Sufficiently clear.
Point c
Sufficiently clear.
Point d
The term “other facilities” among others are facilities used in the transactions and securities administration.
Article 17
Sufficiently clear.

Article 18
Point a
The term “Money Market monitoring” is conducted among others through monitoring system of transactions in foreign currencies and rupiah. Point b Sufficiently clear.
Article 19
Sufficiently clear.
Article 20
Sufficiently clear.
Article 21
Sufficiently clear.
Article 22
Sufficiently clear.
Article 23
Sufficiently clear.
Article 24
Sufficiently clear.
Article 25
Sufficiently clear.
Article 26
Sufficiently clear.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6748