TEMPO.CO, Jakarta - Bank Indonesia (BI) will issue a new regulation on the management of dividends provided by corporations to shareholders. The policy is aimed at strengthening macroprudential framework amid limited room for monetary relaxation.

BI Governor Agus Martowardojo said that BI is currently highlighting the dynamics of corporate performance in early 2017. BI also intends to ensure that corporations have sufficient and solid capitals to withstand global and domestic economic pressures.

"We believed that dividend payment is a good think, but we need to maintain institution sustainability so that it is ready to face challenges uncertainty in 2017, 2018 and 2019," Agus said on Thursday, February 16, 2017.

BI economic and monetary policy executive director Juda Agung explained that the dividend management policy would focus on the banking sector.

"However, it still needs deliberation. It's too early to tell," Agung said.

Agus predicted that a reference cut as a form of monetary relaxation policy this year is unlikely. However, Agus promised that the calculation of the minimum reserve requirement (GWM) averaging will be implemented in the second quarter.

Juda Agung explained that the GWM averaging will use a two-week average calculation period. The weighted average is 1.5 percent of the GWM ratio, which is set at 6.5 percent.

At a board of governors meeting on February 15 and 16, 2017, BI decided to maintain the seven-day reverse repo rate at .4.75 percent. The decision marked a cease of reference rate cut since five months ago when BI cut the seven-day reverse repo rate to 4.5 percent from 5 percent.

ANTARA