BI Claims Banking Liquidity Remains Ample, Provides Evidence

Bank Indonesia (BI) views banking liquidity resilience as remaining well-maintained to support intermediation targets. This is reflected in the overnight interbank rate (INDONIA), which had reached 6.62% on 18 June 2026 and declined to 6.17% on 16 July 2026. Head of the Communication Department, Ramdan Denny Prakoso, explained that the decline in INDONIA reflects reduced demand pressure for liquidity in the interbank money market, allowing short-term funding needs to be met at lower costs. “This condition indicates that money market liquidity remains adequate,” Denny stated in an official release on Friday (17/7/2026). He further noted that this situation is influenced by Bank Indonesia’s liquidity expansion strategy through various monetary instruments such as repos, swaps, and secondary market government bond purchases. As of 16 July, BI’s liquidity expansion through monetary operations was recorded at IDR 837.11 trillion. “This expansion strategy also supports double-digit growth in the monetary base (M0), which was 12.8% year-on-year at the end of June 2026,” he explained. According to Denny, BI is also maintaining intensive communication with banks to ensure that obstacles to liquidity distribution between banks can be resolved with well-managed risks. In addition, BI continues efforts to develop the money market in collaboration with market associations, banks, and other authorities to create a deep, liquid, and efficient money market. Denny confirmed that surveillance and supervision are continuously strengthened to enforce regulations and ensure market behaviour remains within reasonable corridors. “Going forward, Bank Indonesia will continue to monitor and ensure liquidity adequacy to support the effectiveness of monetary policy transmission in strengthening stability and encouraging economic growth,” he stated. This strategy, Denny added, will be continuously reinforced so that interbank liquidity distribution is well-maintained, thereby supporting an efficient interest rate formation process and strengthening monetary policy effectiveness.