IMF recommends Indonesia central bank limit direct bond purchases in 2022

Some of the liquidity support has come in the form of government bond purchases in auctions and through private placement, to limit the government's debt interest expenses

The International Monetary Fund has recommended Bank Indonesia (BI) limit its 2022 direct purchases of government bonds to periods of market dysfunction, as Southeast Asia's largest economy begins to unwind pandemic-era economic stimulus.

In a report published on Wednesday, the fund also recommended BI allow greater flexibility in the rupiah exchange rate if the economy is faced with adverse spillovers from global monetary tightening.

"The IMF team supports the authorities' commitment to exit from monetary budget financing by the end-2022 target date, and further recommends confining further primary market purchases under the market mechanism this year only to periods of severe