Indonesia's central bank aims to increase repurchase agreements between commercial banks by 30% this year to 1,026 deals after 76 banks signed a repo master agreement on Monday, its deputy governor said.

An increase in repo transactions would deepen the financial market and help banks manage short-term liquidity issues in Southeast Asia's largest economy, Destry Damayanti, senior deputy governor of Bank Indonesia said in a speech at the signing ceremony.

"We want to deepen our financial market, so that it won't be too volatile when global turmoil happens," she said.

Most interbank transactions currently are in the unsecured overnight market.

There has been a gradual increase in repo contracts in the past three years, although the amount is still small, with daily transactions reaching around 11.4 trillion rupiah ($775.77 million) now, compared with around 1.1 trillion rupiah in 2019, Destry said.

Fifty of 106 banks operating in Indonesia had used repo transactions prior to the signing. Top lenders Bank Mandiri , Bank Rakyat Indonesia and Bank Central Asia were among 76 banks who signed the agreement.

Destry also said Bank Indonesia expected to establish a central counterparty clearing house to facilitate transactions in the financial market by early next year.


($1 = 14,695.0000 rupiah) (Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Susan Fenton)