Purbaya Criticises This Indicator: Banks Do Not Even Know They Are Lacking Funds

Finance Minister Purbaya Yudhi Sadewa has stated that he will utilise the base money or M0 method to monitor the liquidity conditions of the financial system.

Purbaya noted that moving forward, his office will no longer rely on the ratio of liquid assets to third-party funds (AL/DPK) to assess liquidity conditions. This decision stems from the belief that using base money provides a more accurate depiction of the actual situation.

“The AL/DPK ratio is illusory; it sometimes appears good even when banks are actually facing a shortage of funds. Therefore, I will not use that; I will use another figure, namely base money,” Purbaya told reporters at the DPR building on Wednesday (2/9/2026).

Purbaya explained that the use of base money can monitor banking liquidity, including the state of bank lending.

“Base money, M0, or primary money, has been quite effective in describing the liquidity conditions of the entire financial system. As of the end of July 2026, base money growth had reached 18.3%,” Purbaya explained.

Furthermore, his office will continue to coordinate with the monetary authority, Bank Indonesia (BI), to ensure that liquidity conditions continue to improve.

“I believe that with better coordination between the Ministry of Finance and the central bank (BI), the space for us to create favourable liquidity conditions for the banking sector is wide open,” he said.

With such coordination, the private sector can achieve faster growth as liquidity will no longer be as tight as previously experienced.

“What does this mean? The non-government or private sector can grow better than in previous years,” he added.