BI: Bank Liquidity Resilience Maintained to Support Intermediation

Bank Indonesia (BI) views that banking liquidity resilience remains maintained to support intermediation targets, reflected in the movement of INDONIA, or the overnight interbank money market rate, which has experienced a decline. BI noted that INDONIA reached 6.62 percent on 18 June 2026, then fell to 6.17 percent on 16 July 2026. “The decline in INDONIA reflects reduced pressure on liquidity demand in the interbank money market, so that short-term funding needs can be met at a lower cost. This condition indicates that money market liquidity remains adequate,” said BI Senior Deputy Governor Destry Damayanti in a statement in Jakarta on Friday. Furthermore, BI noted that this condition is influenced by the central bank’s liquidity expansion strategy through various monetary instruments such as repurchase agreements (repo), swaps, and purchases of Government Securities (SBN) in the secondary market. Destry conveyed that BI also continues to conduct intensive communication with banks so that obstacles to interbank liquidity distribution can be overcome with well-managed risks. In addition, money market development efforts continue to be carried out in collaboration with market associations, banks, and other authorities, to create a deep, liquid, and efficient money market. Surveillance and supervision continue to be strengthened in enforcing regulations and ensuring market behaviour remains within reasonable corridors. According to her, this strategy is also continuously reinforced so that interbank liquidity distribution is well maintained, thereby supporting an efficient interest rate formation process and strengthening the effectiveness of monetary policy.