Extension of Excess Budget Balance Placement: Purbaya Optimistic Credit Growth Could Hit 20 Per Cent

Finance Minister Purbaya Yudhi Sadewa stated that the placement of the Excess Budget Balance (SAL) in the banking sector will not disrupt banking liquidity; rather, it could drive credit growth to reach 20 per cent.

“If the SAL is maintained, it is sufficient to create credit growth above 20 per cent. The latest data shows credit at 13.8 per cent, an increase from previous periods due to the influence of liquidity within our financial system,” Purbaya told reporters at the Parliament Complex, Jakarta, on Wednesday (2/9/2026).

The Finance Minister previously decided that the SAL injection would be extended until July 2027. According to him, a longer duration for the placement of government funds provides a greater opportunity to create favourable liquidity conditions for the banking sector.

Purbaya noted that he prefers using the development of base money (M0) to assess the liquidity conditions of the financial system, rather than the ratio of liquid assets to third-party funds (AL/DPK).

He stated that base money grew by 18.3 per cent in July 2026, while growth in August is expected to remain around the 18 per cent mark.

He also intends to enhance coordination with Bank Indonesia (BI) to ensure that the placement of the SAL delivers an optimal positive impact on the national economy.

“With better coordination between the Ministry of Finance and the central bank, the space for us to create good liquidity conditions for the banking sector is wide open. The private sector can grow better than in the previous year,” he added.

“Even if the government were passive, the economy could grow by 6 per cent. Since the government is currently proactive, it will be significantly above 6 per cent,” he further remarked.

Should circumstances arise where the government needs to withdraw funds, Purbaya ensured that he would coordinate with BI to ensure that base money conditions remain undisturbed.

“If we are forced to withdraw, the SAL cannot be used without following parliamentary procedures. Part is placed in BI, and part is placed in the banking system according to our cash flow management needs. This happens to have a positive impact on the banks. If it does need to be used, we will communicate with the central bank so that base money is not disrupted,” he said.