Airlangga urges 20 percent of 'under the mattress' gold to enter bullion ecosystem

Coordinating Minister for Economic Affairs Airlangga Hartarto has asked PT Pegadaian (Persero) and PT Bank Syariah Indonesia (Persero) Tbk (BSI) to move 20 percent of the 1,800 tonnes of gold owned by citizens, or kept ‘under the pillow’, into the bullion ecosystem.

“It was mentioned earlier that the gold ‘under the pillow’ amounts to 1,800 tonnes, with an extraordinary value of 252 billion US dollars. So, the task for Pegadaian and BSI is perhaps to move just 20 percent of it from under the pillow into financial instruments,” Airlangga said at the inauguration of the Indonesia Bullion Market Association (IBMA) in Jakarta on Thursday.

Airlangga explained that the government continues to push downstreaming policies, including bullion, as conveyed by President Prabowo Subianto.

Therefore, bullion has become one of the aspects the government will rely on going forward, especially to increase the added value of downstreaming in the mining and energy sectors.

The Coordinating Minister said the establishment of IBMA marks a new phase in the development of Indonesia’s bullion industry.

After the regulatory and institutional foundations were successfully built through the implementation of bullion business activities, the next focus is to create a market that is increasingly efficient, liquid, transparent and integrated.

“IBMA is expected to become a catalyst that strengthens industry collaboration while increasing the competitiveness of Indonesia’s bullion market,” Airlangga said.

It also includes companies that trade gold bars (bullion dealers) as well as financing companies and non-bank financial institutions licensed in the bullion industry and bullion banks.

Currently, there are 11 companies joining IBMA, namely PT Pegadaian (Persero), Bank Syariah Indonesia (Persero) Tbk (BSI), PT Hartadinata Abadi Tbk (HRTA), UBS Gold, PT Amman Mineral Internasional Tbk (AMMAN), Galeri 24, and Brinks Solution Indonesia.

Furthermore, ICDX Group, as well as PT Central Mega Kencana (CMK, which oversees the jewellery brands Mondial, Frank & co. and The Palace Jeweler), PT Sentral Kreasi Kencana (commonly known as SKK Jewels), and PT Laku Emas Indonesia.