JAKARTA, May 6 (Reuters) - Indonesia’s central bank will hold daily auctions to add or withdraw liquidity in the money market, increasing the increase in order to better channel excess liquidity to some banks who are short on cash, an official told reporters on Monday.
Nanang Hendarsah, who heads Bank Indonesia’s (BI) monetary management department, said the interbank money market “had not been optimal” in balancing liquidity, noting that its aggregate position was in excess currently.
Auctions to inject liquidity were less frequent earlier, though auctions to mop up liquidity had been held on a daily basis, Hendarsah said.
BI will also add 3-month contract for repurchase or reverse repurchase transactions to the auctions once a week, he said.
Reporting by Maikel Jefriando Writing by Gayatri Suroyo; Editing by Simon Cameron-Moore