Purbaya’s Rp 200 trillion gamble: Catalyst or costly misfire

KN. Newly installed Finance Minister Purbaya Yadhi Sadewa has jolted Indonesia’s policy landscape with an audacious move just days into his tenure. He has redirected the government’s excess budget balance of Rp 200 trillion (US$12.5 billion) from Bank Indonesia to state-owned banks, aiming to inject liquidity into the financial system, spur credit growth and ultimately jumpstart economic activity. Yet questions swirl over whether this is the right policy to propel Indonesia’s growth.

Purbaya has long criticized the government’s habit of parking funds domestically. He noted that more than Rp 800 trillion remains idle, sourced mostly from debt bearing interest rates of about 7 percent. In his view, this practice is inefficient, drains liquidity from the real economy and props up Bank Indonesia’s Rupiah Securities (SRBI) issuance. His dramatic decision to transfer Rp 200 trillion to state-owned banks is designed to counter that drain. Under Finance Minister Decree (KMK) No. 276/2025, the funds are to be placed in conventional or sharia on-call deposits without an auction mechanism.