Indonesia’s finance chief tightens oversight on state deposits, threatens action against banks misusing public funds amid efforts to boost liquidity.
Finance Minister Purbaya Yudhi Sadewa has issued a stern warning to banks receiving Rp200 trillion (S$16 billion) in state deposits, prohibiting them from using the funds to purchase US dollars. He emphasized that any such act would be treated as sabotage against government policy, signaling Jakarta’s firm stance on maintaining rupiah stability.
Strict Ban on Dollar Purchases
Speaking via Zoom in Bogor on October 10, Minister Purbaya warned that any bank found using government deposits to buy US dollars would face direct inspection. “If I find any bank doing that, I will investigate the underlying transactions. Using these funds to buy dollars is clear sabotage of government policy,” he said. The government has placed Rp200 trillion in deposits across state-owned banks to inject liquidity into the economy.
Breakdown of Fund Placement
The deposits were distributed as follows: Rp55 trillion each to Bank Mandiri, Bank Rakyat Indonesia (BRI), and Bank Negara Indonesia (BNI); Rp25 trillion to Bank Tabungan Negara (BTN); and Rp10 trillion to Bank Syariah Indonesia (BSI). These placements, drawn from state reserves held by Bank Indonesia, are meant to stimulate lending and support business activity, not currency speculation.
Preventing a Repeat of 1998
Purbaya compared today’s controlled monetary growth with the chaos of the 1998 financial crisis. “Back then, base money growth exceeded 100%, interest rates soared, and companies couldn’t borrow—so they turned to the dollar, causing the rupiah to collapse,” he recalled. As of September 30, base money (M0) grew 13.2%, a level he described as stable and far below the danger zone of 20–30%.
Liquidity Boost and Lending Impact
According to Finance Ministry Fiscal Strategy Director General Febrio Kacaribu, the policy has already strengthened credit growth since being implemented on September 12, 2025. Government deposits carry an interest rate of around 3.8%, lower than the average banking cost of funds at 4.5–5.5%. This provides banks with cheaper liquidity, enabling them to lend more aggressively while reducing overall interest pressure in the market.
Realisation of Fund Utilisation
Data from the ministry show encouraging progress. As of early October:
- Bank Mandiri: 74% absorbed
- BRI: 62% absorbed
- BNI: 50% absorbed
- BTN: 19% absorbed
- BSI: 55% absorbed
In total, around Rp118 trillion (nearly 60% of the funds) have been channeled into the real economy—mainly for working capital and investment financing.
Possible Fund Reallocation to Regional Banks
At the Investor Daily Summit in Jakarta (October 9), Purbaya warned that funds not fully utilised by major state banks could be reallocated to regional development banks (BPDs) such as Bank DKI and Bank Jatim. “If a bank can’t use the funds, I’ll move them to another—especially those with stronger local backing,” he said.
Encouraging Lending, Not Speculation
Purbaya reiterated that banks are free to channel the funds into sectors like property or automotive, but are strictly prohibited from currency speculation. “They can lend to any productive sector, but if I find they’re using the money to buy dollars, I’ll take action,” he declared. The minister added that the measure has already lowered market interest rates and improved liquidity across the financial system.
Indonesia’s Rp200 trillion liquidity injection marks a bold attempt to stimulate lending without jeopardizing currency stability. By drawing a firm line against dollar speculation, Minister Purbaya aims to sustain the rupiah’s strength and prevent a repeat of past financial turmoil—while ensuring state funds genuinely serve the nation’s economic recovery.
Sources: Katadata.co.id (2025) , CNN Indonesia (2025)
Keywords: Purbaya Yudhi Sadewa, Bank Mandiri, BRI, BNI, BTN, BSI, State Deposits, Liquidity Management
