September 11, 2025 | 10:58 am
TEMPO.CO, Jakarta - Indonesian Finance Minister Purbaya Yudhi Sadewa announced that President Prabowo Subianto has approved the government’s plan to withdraw Rp200 trillion from its funds deposited in Bank Indonesia (BI).
The funds, part of a total Rp425 trillion in government deposits, will be redirected to the banking sector to spur economic activity and accelerate growth.
Purbaya delivered the statement during a press briefing after meeting the President at the State Palace in Jakarta on Wednesday night, September 10, 2025. “Yes, it’s approved (by the President),” he told reporters, as quoted by Antara.
The Rp200 trillion will be injected into banks to increase liquidity and encourage lending to the public. “The goal is for banks to suddenly have a lot of cash, and they can only channel it through credit. This way, we are forcing the market mechanism to function,” Purbaya explained.
The government, he stressed, will ensure the funds are not diverted into purchasing State Bonds (SUN). Instead, the money is intended to circulate within communities and stimulate real economic activity.
“It’s like when you deposit money in a bank. The distribution will be up to the bank. But we will strive to make sure it doesn’t end up in SUNs again,” he said.
According to Purbaya, the strategy is meant to accelerate the flow of money in the economy. “We are asking BI not to absorb the funds so that they truly remain in the system and allow the economy to move faster,” he added.
Addressing concerns about inflation, Purbaya dismissed the possibility of hyperinflation resulting from the move. He explained that inflation risks only arise if economic growth exceeds potential growth. “If we are at 6.5 percent or higher, then yes, there could be inflation. But as long as growth remains around 5 percent, we are far from it,” he said.
“That’s what economists call demand-pull inflation, and we’re still far from that point.”
He expressed optimism that the policy would not trigger inflation, noting that Indonesia has not achieved growth above 6.5 percent since the last economic crisis. “Since then, our growth has never reached 6.5 percent. So, the space to grow faster is wide open without causing inflation,” he emphasized.
Demand-pull inflation occurs when aggregate demand outpaces aggregate supply, leading to too much money chasing too few goods. This typically happens when consumption rises sharply but production capacity lags behind.
The plan to withdraw Rp200 trillion in idle funds from BI was first outlined by Purbaya earlier on Wednesday morning during his inaugural working meeting with the House of Representatives’ Commission XI.
The funds come from the Budget Surplus (SAL) and Excess Budgetary Payments (SiLPA), which together total Rp425 trillion currently held in government accounts at BI.
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