Bank Indonesia (BI) has injected liquidity or quantitative easing in banks to reach Rp 726.57 trillion during 2020. One of the sources is the statutory reserve requirement.

"Mainly sourced from the decrease in statutory reserves (GWM) and monetary expansion," said BI Governor Perry Warjiyo when announcing the results of the January period meeting of the Board of Governors (RDG) in Jakarta, Thursday (21/1).

He detailed that the decline in GWM during 2020 reached Rp. 155 trillion and the monetary expansion to reach Rp. 555.77 trillion. In 2021, Bank Indonesia will continue to inject liquidity into banks, which as of January 19, 2021, has reached Rp. 7.44 trillion

Loosening liquidity conditions, said the BI Governor, boosted the ratio of Liquid Assets to Third Party Funds (AL / DPK), namely 31.67 percent in December 2020. In addition, the average interest rate on the Inter-Bank Money Market (PUAB) is also low around 3.04 percent as of December 2020.

Loosening liquidity and BI's low benchmark interest rate of 3.75 percent contributed to lowering deposit and working capital loan rates from 4.74 percent and 9.32 percent in November 2020 to 4.53 percent and 9.21 percent in December 2020. The decline in lending rates is expected to continue with loose liquidity and low Bank Indonesia policy rates.

Meanwhile, the yield on 10-year SBN increased from 5.86 percent at the end of December 2020 to 6.27 percent on January 20, 2021.