BI Refutes Purbaya's Claim, Assures Banking Liquidity Remains Ample
Bank Indonesia (BI) has affirmed that banking liquidity remains in a condition adequate to support intermediation targets. This statement was issued after Finance Minister Purbaya Yudhi Sadewa revealed that the data indicators used by the Financial System Stability Committee (KSSK) regarding banking liquidity were erroneous.
Purbaya made the statement during a working meeting with House of Representatives Commission XI in Jakarta on Wednesday (15/7/2026). He explained that the policy of placing Excess Budget Balances (SAL) from Bank Indonesia into banks, implemented since September 2025, aimed to boost liquidity and impact the economy, as reflected in the development of base money (M0). However, he admitted the data used to measure liquidity in the financial market was inaccurate. The data originated from Bank Indonesia, the Financial Services Authority (OJK), the Deposit Insurance Corporation (LPS), and the Ministry of Finance, all members of the KSSK, which Purbaya currently chairs.
“Ask the LPS, BI, and the Ministry of Finance, they all say liquidity is ample, but their data is all wrong. So, there is a data error or an indicator error that we at the KSSK have been using all this time. I have asked the KSSK team to fix it, but apparently they haven’t been able to yet,” Purbaya stated. His view stemmed from feedback from the banking sector, creating a contradiction between reported data and actual conditions on the ground. He noted that the indicator used to describe liquidity conditions has been M0 data, which BI releases monthly. Purbaya said M0 growth had increased following the placement of government funds in banks. “Even though the central bank’s indicators say it’s ample, the reality is there is none. Because when the banks complained, I asked them how it was, and they said the money really wasn’t there. I said, the indicators are all good. That means the indicators we have been using are not accurate,” he elaborated.
Responding to this, BI refuted the notion that banking liquidity conditions are inadequate. According to BI, banking liquidity remains maintained to support intermediation targets. This is reflected in the Indonesia Overnight Index Average (INDONIA), the interbank interest rate benchmark, which reached 6.62% on 18 June 2026 before falling to 6.17% on 16 July 2026. “The decline in INDONIA reflects reduced pressure on liquidity demand in the interbank money market, allowing short-term funding needs to 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 on Friday (17/7/2026).
Destry explained that this condition was influenced by BI’s liquidity expansion strategy through various monetary instruments, such as repos, swaps, and purchases of Government Securities (SBN) in the secondary market. As of 16 July 2026, BI’s liquidity expansion through monetary operations reached Rp 837.11 trillion. “This expansion strategy also supports double-digit base money (M0) growth, which was maintained at 12.8% year-on-year at the end of June 2026,” she clarified.
Destry stressed that BI continues to engage in intensive communication with banks to ensure that barriers to interbank liquidity distribution can be overcome with well-managed risks. Furthermore, money market development efforts continue through collaboration with market associations, banks, and other authorities to create a deep, liquid, and efficient money market. Surveillance and supervision are also being continuously strengthened to enforce regulations and ensure market behaviour remains within a reasonable corridor. “Going forward, Bank Indonesia will continue to monitor and ensure liquidity adequacy to support the effectiveness of monetary policy transmission in strengthening stability and driving economic growth. This strategy is also continuously reinforced so that interbank liquidity distribution is well maintained, supporting an efficient interest rate formation process and strengthening monetary policy effectiveness,” she said.