Indonesia’s economy currentlystands at a crucial crossroads. On one hand, inflation remains under control ataround 2 percent, a milestone that provides space for expansionary policy. Onthe other hand, credit growth in the banking sector has slowed, while therupiah faces external pressures from global turbulence. In this situation, thenewly appointed Minister of Finance has taken a strategic step by channelingback government savings that have long been parked at Bank Indonesia, directingthem through the banking system to the public. This policy marks a newdirection in fiscal and monetary coordination, aimed not only at safeguardingliquidity but also at ensuring that state funds work for the benefit of thepeople.
Minister of Finance Purbayaunderscored that the primary aim of this step is to prevent government fundsfrom lying dormant in the central bank. He explained that the ministry will drawdown a portion of state savings, consisting of excess budget balances (SaldoAnggaran Lebih or SAL) and unspent appropriations (SiLPA), which togetheramount to approximately Rp 425 trillion. These balances have been held ingovernment accounts at Bank Indonesia. From this total, the government plans towithdraw Rp 200 trillion and return it to the economy. In doing so, publicfunds that had remained stagnant can now serve as an engine for economicactivity.
This policy is also linked tothe broader framework of burden sharing between the government and BankIndonesia. During the pandemic, burden sharing took the form of central bankpurchases of government bonds to help cover widening fiscal deficits. Today,the burden is divided differently. The government provides additional liquidityto stimulate credit, while Bank Indonesia continues to safeguard monetarystability through open market operations, interest rate management, andexchange rate interventions when necessary. This represents a new and more adaptiveface of fiscal and monetary coordination, in which both institutions walk instep to meet global challenges.
Naturally, the success of thispolicy depends heavily on how the funds are directed. If the liquidity ends upin speculative sectors or unproductive asset purchases, its impact on the realeconomy will be minimal, and it may even fuel asset bubbles. Conversely, if thefunds are allocated to sectors with high multiplier effects, the benefits willmultiply. Each rupiah of credit extended to farmers, micro and smallenterprises, small-scale manufacturers, or affordable housing developers canrapidly translate into real economic activity. Output increases, jobs arecreated, consumption rises, and ultimately tax revenues grow.
Indonesia has many sectors thatcan serve as priority targets. Agriculture not only employs a large share ofthe workforce but also reduces reliance on food imports that have longpressured the trade balance. Labor-intensive manufacturing such as textiles andconsumer electronics can quickly absorb workers while boosting exports.Construction and basic infrastructure carry strong multiplier effects, as everyproject generates demand for cement, steel, transport, and logistics. Mineraldownstreaming and renewable energy align with the government’s long-term agendaof building domestic value added. And of course, micro, small, and mediumenterprises, as the backbone of the economy, must remain a central focus tosustain household purchasing power.
Beyond the sectoral considerations,the policy also sends a strong positive signal. The public sees that thegovernment will not allow state funds to remain idle without purpose. Amidglobal uncertainty, this decision communicates a simple but powerful message:the state is present, and public money is once again working for the people.Such sentiment is vital, as trust and optimism are psychological drivers ofeconomic momentum that can be just as important as statistical indicators.
Challenges remain. Coordinationbetween the Ministry of Finance, Bank Indonesia, and the banking sector mustrun smoothly. Fiscal discipline must be maintained so that this expansionarystep is not perceived by markets as unchecked spending. The mechanisms forchanneling credit must also be closely monitored to ensure they reach theintended businesses and households, rather than becoming entangled inbureaucracy or captured by a narrow group of beneficiaries. Transparency andaccountability will be essential to success.
Nevertheless, this policydirection deserves recognition. With careful design, the injection of liquiditythrough government savings can serve as a catalyst for more inclusive economicgrowth. It demonstrates how fiscal and monetary synergy can deliver creativepolicies that differ from past patterns while still maintaining stability.
Ultimately, economic policy isnot only about numbers, charts, or technical reports. What matters most is howit touches the lives of ordinary people: helping farmers access capital,enabling young families to afford housing, supporting micro-enterprises toexpand, and ensuring factory workers keep their jobs. If those outcomes arerealized, then this liquidity policy will be remembered not merely as atechnocratic experiment but as tangible proof that the state knows when to stepin and how to do so in the right way.
