, while stability of the rupiah exchange rate remains our priorities. the accommodative macroprudential policies will be continued to boost credit and financing for national economic recovery, while maintaining financial system stability. the digitalization of the payment system according to bspi 2025 and the management of rupiah currency according to bpur 2025 continues to be accelerated to support the digital financial economy as a source of economic recovery, especially msmes and the retail sector. bank indonesia will continue to strengthen synergies with the government, the kssk, banks and the business world to strengthen optimism for national economic recovery. monetary policy direction monetary policy stimulus will continue in 2021. the stability of the rupiah exchange rate in accordance with the fundamentals and market mechanisms continues to be a major concern to ensure that it remains conducive to national economic recovery. low interest rates and loose liquidity will be maintained until there are signs of increasing inflationary pressure. as noted, the current bank indonesia policy rate of 3. 75 % is the lowest in history. liquidity will also remain loose to support bank lending and financial system stability. as previously stated, bank indonesia has implemented quantative easing of idr682. 0 trillion, or around 4. 4 % of gdp, the largest monetary stimulus among emes central banks. the monetary operation strategy will be pursued to support this monetary policy stance. with bank indonesia ’ s low policy bank indonesia ’ s annual meeting 2020 interest rates and large liquidity easing, it is time for banks to immediately lower interest rates and increase credit for the business world. this step is a joint commitment to strengthen optimism for national economic recovery. indonesia ’ s large balance deficit starting in 2021 and the following years. the close coordination between the bank indonesia monetary stimulus and the government ’ s fiscal stimulus continues to strengthen the national economic recovery. in this regard, bank indonesia will continue to purchase sbn from the primary market to finance the 2021 state budget through regular auction as a non - competitive bidder, greenshoe option, or private placement in accordance with the joint decree between the minister of finance and the governor of bank indonesia on 16 april 2020. the amount will be determined based on prudent fiscal and monetary policies, among others by prioritizing the government ’ s plan to fulfill the 2021 state budget financing from its own funds, foreign debt, issuance of global and domestic bonds ; market capacity to absorb primary market sbn auctions ; and the

global uncertainty is expected to stimulate foreign capital inflows and further appreciation of the exchange rates in developing countries, including indonesia. 2021 period is expected to narrow in 2022 - 2023 as economies in many countries recover ( graph 8 ). a large fiscal stimulus was provided by many countries for economic recovery from the impact of the covid - 19 pandemic. fiscal stimulus were generally allocated for health budgets, social assistance programs for the community, incentives for the business world, especially for micro, small and medium enterprises ( msmes ), and tax relief for corporations. meanwhile, tax revenues dropped dramatically due to the economic recession. the sheer amount of additional spending amid falling tax revenues has led to a widening of the fiscal deficit in many countries, with a large increase in deficit exceeding 8 % of gdp in developed countries compared to deficits in emes, which are generally lower due to the limited financing required ( graph 7 ). the size of the fiscal stimulus has had a positive impact on encouraging economic recovery since the third quarter of 2020 and is expected to accelerate future economic recovery from the covid - 19 pandemic. the widening output gap in the 2020 - the process of economic recovery from the covid - 19 pandemic was also supported by monetary stimulus from central banks in many countries. in developed countries, with monetary policy interest rates approaching zero percent, central banks have taken monetary stimulus by injecting liquidity ( quantitative easing - qe ) into the financial sector, particularly banking. this has been done by, among others, through an asset purchase program from the market, including government bonds, private bonds, and credit securities. as a percentage of gdp, the largest amount of qe was carried out by the european central bank ( ecb ) then by the bank of japan ( boj ), graph 8. forecast for output gap, 2020 - 2023 ( % ) - 1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 esp ita fra gbr aus deu jpn can usa ave, 2020 - 2021 source : imf weo october 2020 - 2. 4 - 2. 3 - 3. 2 ind zaf mex bra idn tur chn pol pol ave, 2022 - 2023 bank indonesia ’ s annual meeting 2020 bank of england ( boe ) and the us federal reserve ( graph 9 ). in emes, monetary stimulus is implemented through a combination of lowering policy interest rates and inject