Second Amendment to the Bank Indonesia Regulation Concerning Statutory Reserves in Rupiah and Foreign Currencies at Bank Indonesia for Commercial Banks

This paper, the second amendment to a Bank Indonesia Regulation concerning statutory reserves for commercial banks in local and foreign currencies at Bank Indonesia, states that:

• As a monetary instrument, the stipulation of policies for statutory reserves needs to be adjusted periodically according to:
  • The condition of liquidity,
  • The ability of the bank to execute its intermediate function,
  • The direction of Bank Indonesia policies.
• Taking into consideration the above conditions, the Governor of the Bank Indonesia has deemed it necessary to increase the remuneration of obligatory statutory reserves in ‘rupiah at Bank Indonesia.

The amendment specifies that:

• The Bank India regulation, concerning statutory reserves for commercial banks, will be altered in its complete form,
• Bank Indonesia will pay interest for each working day according to the ‘rupiah account balance allocated for meeting the requirements for the additional reserves,
• The policy for the payment of interest and/or the percentage of interest may be adjusted periodically according to the condition of the economy and the policy direction of Bank Indonesia.

Article 2 of the amendment specifies the date on which it will come into force. The paper concludes with an elucidation of the second amendment.