Jakarta (ANTARA) - Economics is not merely a series of numbers or\ngraphs on a screen. Economics is the heartbeat of life that throbs in\ntraditional markets, street-side grocery shops, and even the camps of\ncamel herders in the countryside.<\/p>\n
Currently, that heartbeat is being tested by global and domestic\nconditions. It is at this point that monetary policy plays a role not\nonly as a guardian of the exchange rate but also as a life-support\nsystem for the main pulse of our economy, namely UMKM.<\/p>\n
Bank Indonesia\u2019s move to raise the policy rate or BI Rate to 5.25\npercent in May 2026 is often seen by many as a move that will choke\ncredit flows.<\/p>\n
However, we need to look deeper. This policy is an effort to keep the\nblood pressure of the national economy under control, even in the face\nof global inflation pressures.<\/p>\n
The decision to raise the benchmark interest rate is a manifestation\nof the commitment to prevent living costs from rising too high.<\/p>\n
We certainly understand that prices of soybeans for tempeh makers,\nflour for street-food sellers, and spare parts for small workshops\ndepend heavily on the stability of the rupiah.<\/p>\n
A disciplined monetary policy is a tangible protection of the\npurchasing power of the most vulnerable.<\/p>\n
Currently, the policies in place are no longer working in a rigid\nmanner. If the BI Rate functions to maintain macro-level stability, then\nthe Macroprudential Liquidity Incentive Policy (KLM) functions like a\nheart that pumps oxygenated liquidity all the way to the smallest\narteries of our economy.<\/p>\n
Data show that as of May 2026, the potential liquidity returned to\nthe banking system amounts to hundreds of trillions of rupiah. In other\nwords, our banking sector actually has a sufficient liquidity supply, so\nit is expected that loan rates for small entrepreneurs can remain\nstable.<\/p>\n
This is what we call an asymmetric monetary strategy. The decision to\nraise the policy rate is expected to calm the financial markets.<\/p>\n
At the same time, banks are given incentives in the form of the\nrefund of mandatory reserves at the central bank through the KLM policy.\nThe condition is that they channel credit to productive sectors,\nespecially UMKM.<\/p>\n
Unblocking blockages<\/p>\n
The national banking sector holds the key as the bridge of liquidity\nflows. With the increasingly strengthened KLM incentive, banks have\nplenty of breath to continue lending. Banks do not need to worry that\ntheir liquidity will run dry because they already have sufficient\ncushions.<\/p>\n
However, there is an interesting phenomenon in our banking\nintermediation circulation, namely the high level of undisbursed loans\nor credits that are not yet realized even though they have been\napproved. Up to the most recent period, there have been more than 2,500\ntrillion rupiah in credit commitments that are idle.<\/p>\n
On one hand, UMKM experience difficulties in developing their\nbusinesses due to lack of capital, but on the other hand, trillions of\nrupiah merely become figures on banks\u2019 books.<\/p>\n
The challenge now is how to translate this caution into measured\ncourage. Undisbursed credit must be channelled immediately to the\nproduction engines in the hands of the people to contribute to the\nnation\u2019s growth.<\/p>\n
Here the role of the Macroprudential Intermediation Ratio (RIM) as a\ncatalyst to clear the blockage. The banks are invited to truly flow out\nthe available funds so that they do not remain locked in safes.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rupiahs-pulse-in-the-lifeblood-of-umkm-1779537335", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }