Part 1 – Liquidity Monitor
- Domestic net liquidity or net bank balance (NBB) saw a deficit at -1.70% of GDP by the end of 2024, which should have translated to a weaker Rupiah were it not for SRBI issuance.
- Lower yields in early 2025 has not supported Rupiah, as bond inflows have been offset by equity outflows while last year’s trends such as weakening household liquidity may persist.
Part 2 – Special Topic: Export proceeds (DHE) regulation
- The requirement to place 100% of DHE domestically may add around USD 50 Bn in liquidity, but with little impact on NBB and therefore the Rupiah.
- But cracking down on illicit outflows (“missing money”) from mis-invoicing and transfer pricing could bring genuine improvement in the growth-versus-Rupiah tradeoff.
