BI Relaxes Liquidity Policy to Spur Lending and Economic Growth

Bank Indonesia (BI) is strengthening its loose macroprudential liquidity policy to encourage economic growth through increased bank lending and financing to the real sector. The move coincides with the decision to hold the benchmark interest rate at 5.75%. One of the policies adopted is increasing the total Macroprudential Liquidity Incentive (KLM) that banks can receive to a maximum of 6% of Third Party Funds (DPK), up from the previous 5.5%. Bank Indonesia Governor Perry Warjiyo stated that the central bank is also introducing a KLM for Money Market Deepening of up to 2% of DPK for banks that maintain optimal holdings of securities. This policy will take effect from 1 September 2026. On the other hand, BI is strengthening the Inclusive Financing Ratio (RPIM) by expanding coverage to credit for suppliers, distributors, and business partners that support national economic growth. Data from BI shows that bank lending growth in June 2026 reached 12.67% year-on-year, an increase from 11.51% in May 2026. The growth was supported by investment, working capital, and consumer loans. Bank Indonesia projects Indonesia’s economic growth in 2026 to be in the range of 4.9% to 5.7%, supported by domestic demand, the acceleration of government programmes, and the strengthening of bank financing to priority sectors.