Amidst escalating global geopolitical uncertainties projected to\ninfluence market dynamics until the end of 2026, Indonesia\u2019s domestic\neconomic fundamentals are claimed to show solid resilience. The national\neconomic growth rate in the first quarter successfully exceeded 5.61%.\nThis resilience is supported by highly expansive banking intermediation\nperformance, reflected in credit growth nearing double digits at 9.98%,\nand growth in third-party funds (DPK) at 11.4%.<\/p>\n
To maintain growth momentum amidst a high-interest rate cycle, Bank\nIndonesia (BI) continues to formulate accommodative macroprudential\ninstruments. For banking executives and large-scale business actors,\nBI\u2019s current macroprudential policy direction provides a very clear\nsignal: the monetary authority is opening the liquidity tap in a\nmeasured manner for institutions capable of managing their\nintermediation functions innovatively.<\/p>\n
Executive Official of the Macroprudential Policy Department of Bank\nIndonesia, Mr Dhaha P. Kuantan, explained this policy architecture\nthrough the philosophy of a dam management system. The Statutory Reserve\nRequirement (GWM) instrument is essentially the primary \u2018dam\u2019 where part\nof the banking liquidity is held at the central bank for monetary\nstabilisation purposes. However, the water in this dam can be redirected\nback into the veins of the economy through the Macroprudable Liquidity\nIncentive Policy (KLM) instrument.<\/p>\n
\u201cThe GWM essentially involves banking funds placed at BI and held to\nprevent unregulated circulation. However, this liquidity may be\nredistributed as long as it is precisely allocated to leveragable\nsectors that have a large multiplier effect on the economy, such as\nagriculture, industrial downstreaming, housing, and the MSME segment,\u201d\nexplained Mr Dhaha.<\/p>\n
Through a forward-looking mechanism, banks that are able to prepare\nmature business plans and commit to credit distribution at the beginning\nof a period will immediately enjoy the easing of GWM obligations. Up to\nthis quarter, the total liquidity injection provided to the banking\nsystem through the KLM channel has reached Rp424 trillion, equivalent to\n4.76% of total national third-party funds. This represents massive\nliquidity ammunition for banks that are keen to identify expansion\nopportunities in priority sectors.<\/p>\n
As competition for third-party funds intensifies within the financial\nindustry, Bank Indonesia is also undergoing a paradigm shift in\nmeasuring bank intermediation capacity, moving from the conventional\nLoan to Deposit Ratio (LDR) towards the Macroprudential Intermediation\nRatio (RIM). Unlike the rigid LDR, which only compares credit volume to\nthird-party funds, the RIM provides the flexibility in balance sheet\nmanagement required by modern banking executives. Technically, the RIM\nformulation integrates Securities (SSB) instruments from both asset and\nliability perspectives. This transformation signifies that the\nintermediation function remains recognised and positively assessed by\nthe regulator, even if banks seek alternative funding through the\nissuance of bonds or corporate securities.<\/p>\n
Therefore, limitations in collecting conventional customer deposits\nshould no longer be a structural barrier for banks to remain focused on\nexpansive strategies. As an additional calibration instrument following\nthe 50 basis point hike in the BI Rate on Wednesday (20\/5\/2026), BI has\nrefined the KLM structure by introducing three new incentive pathways.\nThis tactical step is taken so that bank management can manage the cost\nof funds more efficiently without sacrificing credit portfolio quality\nor burdening businesses.<\/p>\n
Ultimately, abundant liquidity ammunition from the banking supply\nside will provide no added value if it is not absorbed by solid credit\ndemand. To break this deadlock, BI is proactively running the PINISI\nprogram (Indonesian Intermediation Acceleration). Through this\ninitiative, the central bank is intervening to debottleneck strategic\nprojects. This is a synergistic monetary-scale programme to increase\nBank Indonesia\u2019s capability to form a more measurable domestic economic\necosystem. The presence of the PINISI initiative represents a momentum\nwhere liquidity in the banking system has been prepared by the\nregulator; it now depends on the real sector to ensure that business\nexpansions, infrastructure projects, and submitted investment plans\npossess \u2018bankability\u2019. The synergy between banking liquidity readiness\nand innovation in real sector projects will serve as the primary engine\nfor Indonesia\u2019s future economic growth.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/bis-post-interest-rate-hike-maneuver-strengthening-banks-maintaining-credit-1780883670", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }