Indef: Additional SAL Effective Only if Accompanied by Direct Fiscal Stimulus
Head of the Macroeconomics and Finance Centre at the Institute for Development of Economics and Finance (Indef), M Rizal Taufikurahman, believes that the effectiveness of the additional placement of Rp100 trillion in Excess Budget Balance (SAL) into the banking sector requires support from direct fiscal stimulus policies.
“The additional injection of Rp100 trillion SAL into the banking sector will strengthen liquidity and reduce funding cost pressures, thereby providing more room for credit. However, its effectiveness heavily depends on credit demand,” Rizal stated when contacted by ANTARA in Jakarta on Thursday.
He explained that in conditions of weakening consumption and uncertain economic expectations, the additional liquidity may not be optimally channelled to the real sector.
Rizal opined that households tend to hold back on spending and increase savings (precautionary saving), thus hindering the transmission from liquidity to credit and consumption.
This means the policy does not automatically boost aggregate demand, so its impact on consumption tends to be limited.
Therefore, Rizal described this policy of additional fund placement as more of a liquidity stabilisation measure rather than a growth driver.
“Without support from other policies such as directed credit and direct fiscal stimulus, the funds risk stagnating or shifting to financial instruments, thereby limiting their impact on consumption and growth,” he said.
Previously, Finance Minister Purbaya Yudhi Sadewa announced that the government is once again adding Rp100 trillion in SAL placement to the banking sector.
With this addition, the total SAL funds placed in the banking sector reach approximately Rp300 trillion.
“A week before Eid, I added another Rp100 trillion, injecting it into the economic system. We are seriously maintaining liquidity in the financial system,” Purbaya said in Jakarta on Wednesday (25/3).
The additional funds are channelled ahead of Eid to ensure liquidity remains stable amid potential increases in funding needs.
This step is taken in response to market dynamics, particularly the rise in bond yields, which indicates liquidity pressures in the banking sector.