Indonesia’s Finance Minister Purbaya Yudhi Sadewa has announced a bold fiscal maneuver to unlock Rp200 trillion in idle government funds parked at Bank Indonesia. With President Prabowo Subianto’s approval, the funds will be channeled into the banking system to accelerate credit distribution and economic activity. The move signals a proactive shift in fiscal strategy aimed at boosting growth without triggering inflation.
Key Facts & Background:
- The government holds Rp425 trillion in idle funds at Bank Indonesia, sourced from Saldo Anggaran Lebih (SAL) and Sisa Lebih Pembayaran Anggaran (SiLPA).
- Rp200 trillion will be transferred to banks to increase liquidity and stimulate lending.
- President Prabowo Subianto has approved the plan, which was announced after a meeting at the Presidential Palace on September 10, 2025.
- The funds are intended to circulate in the real economy, not be reinvested in government bonds (Surat Utang Negara/SUN).
- The mechanism resembles a deposit: banks can use the funds for credit, but the government retains withdrawal rights.
- Finance Minister Purbaya emphasized that inflation risks remain low, as Indonesia’s growth rate is still below its potential threshold of 6.5%.
Strategic Insights: This policy marks a strategic pivot in Indonesia’s fiscal management, leveraging dormant capital to energize domestic demand. By injecting liquidity directly into the banking sector, the government aims to catalyze lending to businesses and households, thereby accelerating consumption and investment. The decision to restrict use of these funds for government securities ensures that the stimulus reaches the real economy rather than recycling into passive instruments. Purbaya’s confidence in inflation control reflects a calculated understanding of Indonesia’s output gap and monetary space. If executed effectively, this approach could enhance credit access, support MSMEs, and unlock growth potential without compromising macroeconomic stability. Long-term, it may redefine how fiscal buffers are deployed to respond to cyclical challenges and structural needs.