Function of Bank Indonesia

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BANK INDONESIA FUNCTION

Wahono Diphayana

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BANK INDONESIA VISION

To be a credible institution and the best

central bank in the region by strengthening

the strategic values held as well as through

the achievement of low inflation along with a

stable exchange rate.



BANK INDONESIA MISSION

1. To achieve rupiah exchange rate stability and

maintain the efficacy of monetary policy transmission

in order to drive quality economic growth.

2. To nurture an effective and efficient national financial

system that can withstand internal and external

shocks in order to support the allocation of

funding/financing that contributes to national

economic stability and growth



BANK INDONESIA MISSION

3. To ensure a secure, efficient and smooth payment

system that contributes to the domestic economy and

helps maintain monetary as well as financial system

stability whilst broadening access in the national

interest.

4. To build and maintain the organisation and human

resources of Bank Indonesia, who are performance

based and honour integrity, as well as to enforce good

corporate governance in the implementation of tasks

as mandated in prevailing laws.



BANK INDONESIA STRATEGIC OBJECTIVES

To realize its Mission, Vision and Strategic Values, Bank

Indonesia has stipulated the following medium-long term

strategic objectives :

1. Strengthen inflation control in terms of demand and

supply

2. Maintain exchange rate stability

3. Foster deep and efficient financial markets

4. Maintain financial system stability, underpinned by solid

payment system surveillance

5. Realise directed, efficient and synergetic financial

inclusion



BANK INDONESIA STRATEGIC OBJECTIVES

6. Maintain a payment system that is secure, efficient and

free from disruption

7. Strengthen accountable financial management at Bank

Indonesia

8. Realise an effective and efficient work process

supported by Information Systems, culture and

governance

9. Expedite the availability of competent human resources

10. Build and strengthen strategic alliances and enhance

the public perception of BI

11. Ensure a smooth transition of the supervisory function to

the Financial Services Authority (OJK)



OBJECTIVES AND TASKS OF BANK INDONESIA

Single Objective

In its capacity as central bank, Bank Indonesia has one

single objective of achieving and maintaining stability of the

Rupiah value.

The stability of the value of the Rupiah comprises two

aspects, one is stability of Rupiah value against goods and

services and the other is the stability of the exchange rate of

the Rupiah against other currencies.




Single Objective

The first aspect is as reflected by the rate of inflation and the

second aspect is as reflected by the development of Rupiah

exchange rate against other currencies.

The prescribed single objective is intended to establish a

target that is clear and to be achieved by Bank Indonesia

within its limits and responsibilities. Thus way, the

achievement of the objective of Bank Indonesia will be

easily measurable.




The Three Main Pillars

In the pursuit of the objective, Bank Indonesia is supported

by three pillars, representing its three sectors of task. These

three sectors (see image below) have to be integrated to

ensure that the objective of achieving and maintaining a

stable value of Rupiah can be achieved effectively and

efficiently




The Three Main Pillars In the pursuit of the objective, Bank Indonesia is supported by three pillars, representing its three sectors of task. These three sectors (see image below) have to be integrated to ensure that the objective of achieving and maintaining a stable value of Rupiah can be achieved effectively and efficiently

The Three Main Pillars



BANK INDONESIA ACCOUNTABILITY

The new Bank Indonesia Act demands that Bank Indonesia

must always adhere to the principles of accountability and

transparency in implementing its duties, authorities and

budget. The accountability and transparency demanded

from Bank Indonesia are intended to increase all

stakeholders' participation in overseeing every policy taken

by the Bank.




From the aspect of implementing duties and authority,

accountability and transparency are applied in the form of

open information pertaining the evaluation of monetary

policy implemented in the previous year, and monetary

policy plan and monetary target for the next year, to public

via mass media at the commencement of each year. Such

information is also reported directly to the President and

The House of Representatives - DPR.




Under the supervisory function of The House of

Representatives, Bank Indonesia is required by law to

submit a quarterly -- or as per request -- progress report on

implementation of its duties and responsibilities.




For transparency in budgeting, Bank Indonesia is required

to submit its annual budget to The House of

Representatives. In addition, Bank Indonesia Annual Report

is submitted to State Auditors (BPK) for auditing and the

result is announced to the public through mass media. Bank

Indonesia is also obliged to prepare a weekly balance sheet

for publication in the State Gazette (Berita Negara Republik

Indonesia).




As further steps toward transparency, Bank Indonesia

periodically publishes various publications such as the

Weekly Report (Laporan Mingguan), Monthly Indonesian

Financial and Economic Statistics, Monthly Review of

Monetary Policy, Quarterly Monetary and Economic

Progress, Quarterly Report on Monetary Policy Progress,

and Annual Report. Bank Indonesia's homepage

(http://www.bi.go.id) is accessible for members of the public

who wish to obtain data and information from the Bank.


http://www.bi.go.id/


Thank You


Economy & Finance

Function of Bank Indonesia