Purbaya Opens Opportunity to Place Government Funds in Private Banks, Provided...

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has opened the possibility of placing government funds in private banks, but with strict conditions. He emphasised that only banks with strong fundamentals or a “healthy kitchen” would be considered.

“Private banks, if they want, we will open it up later, the healthy ones. If not, I’ll end up in prison again,” Purbaya said during a halal bihalal gathering with reporters on Wednesday (25/3/2026).

On the same occasion, Purbaya revealed that he has increased the placement of government funds in the consortium of state-owned banks (Himbara) and Bank Jakarta by Rp 100 trillion. With this addition, the total funds placed amount to around Rp 300 trillion.

The addition is intended to suppress the rise in bond yields through the purchase of Government Securities (SBN) by banks.

“If the bond yield rises by 0.1%, I’m already paying attention, what’s going on? If it rises by 0.4%, it’s definitely a drought, lack of liquidity in banks or what’s the cause? I check, oh yes, banks are short, so I add more to the system. A week before Eid, I added another Rp 100 trillion to the economic system. We are seriously maintaining liquidity in our financial system,” he said.

Furthermore, Purbaya explained that liquidity indicators such as the addition of primary money (M0) and the movement of bond yields are the main benchmarks. According to him, placing funds in the banking sector can encourage banks to buy government debt instruments, which ultimately helps to suppress the rise in yields.

“I don’t know if it’s enough. In March, there were indications of yields rising earlier. I thought, if I want to add, to push it down, there needs to be buyers. Just place the money in the banks,” he said.

“Surely the banks will look for the easiest option. BI or buying bonds, they can buy bonds. If they buy bonds, it will push the yields down again. That’s roughly it,” Purbaya stressed.