Analysts Say Rp 100 Trillion SAL Funds Risk Flowing into Government Securities

The government has increased the placement of excess budget balance (SAL) funds into state-owned banks (Himbara) by Rp 100 trillion. However, these funds have the potential to be channelled into government securities (SBN) rather than for lending. Banking analyst and Senior Vice President of the Indonesian Banking Development Institute (LPPI), Trioksa Siahaan, assesses that one of the government’s aims in adding this SAL placement is for banks to channel it into SBN. This is because, in this latest addition of SAL funds, the government has not prohibited banks from channelling the funds into SBN, unlike the previous Rp 200 trillion SAL placement in September 2025. Moreover, according to him, banks will tend to channel the additional SAL funds into SBN rather than lending, as credit demand remains sluggish at present. “Credit demand is still not improving; credit expansion itself will depend on that credit demand, and credit demand will certainly also depend on purchasing power, so businesses will carry out expansion,” he explained. With the additional liquidity from this extra SAL fund, banks can scoop up SBN, thereby increasing demand for the government-issued debt securities. This, he continued, will impact the holding of the rise in SBN yields amid volatile market conditions due to the Iran-Israel conflict. “It can also help ensure that the SBN yield rise itself does not increase so quickly. This needs to be noted regarding the purpose of the fund placement,” he stated. Meanwhile, banking analyst Paul Sutaryono expressed a similar view. Banks will tend to channel the Rp 100 trillion funds into SBN rather than lending because there is no prohibition from the government. Moreover, at present, bank liquidity is abundant following the government’s injection of SAL funds totalling Rp 300 trillion to date. This is reflected in the liquid assets to non-core deposit ratio (AL/NCD) of 121.23 per cent in January 2026, above the 50 per cent threshold, and the liquid assets to third-party funds ratio (AL/DPK) of 27.54 per cent, above the 10 per cent threshold. “The injection of Rp 100 trillion SAL funds deserves appreciation. Because the funds can be used to buy SBN, the recipient banks will be happy to utilise them for purchasing SBN rather than disbursing them as loans to customers,” he told Kompas.com on Wednesday.