[REVISION HISTORY]

Indonesian central bank and fiscal developments

13 recorded revisions of this situation.

What changed

2026-10-23 07:25 UTC → 2026-10-26 01:40 UTC · added ~~removed~~

The Indonesian government has finalized the repayment of Rp218.3 trillion in Bank Indonesia Liquidity Assistance (BLBI) bond debt to Bank Indonesia, concluding a nearly 30-year debt cycle from the 1997–1998 crisis. While the debt relationship with the central bank is resolved, the state continues to pursue collections from BLBI obligors and debtors through the Ministry of Finance. Regarding the Merah Putih Village/Sub-district Cooperatives (KDMP) project, the government is prepared to pay the first installment of Rp37 trillion in September 2026, as allocated in the 2026 state budget. This project, with an estimated total financing of Rp240 trillion, aims to provide operational capital for approximately 80,000 cooperatives. To support this, Coordinating Minister Airlangga Hartarto has proposed legislative amendments to allow the Indonesia Deposit Insurance Corporation (LPS) to guarantee cooperative savings. Monetary policy remains focused on liquidity and stability. Bank Indonesia (BI) has maintained the BI Rate at 5.75 percent, ~~with Governor Destry Damayanti noting that domestic inflation remains stable at approximately 3.19%. To manage liquidity, BI is reducing the yield of Bank Indonesia Rupiah Securities (SRBI), with~~ though it recently increased the ~~12-month yield dropping~~ Deposit Facility rate by 25 basis points to ~~6.76%. Starting November 1,~~ 5% to manage external pressures. To address liquidity challenges, particularly a year-on-year contraction of 8.14% in third-party funds for smaller banks (KBMI I) as of August 2026, BI ~~will implement~~ is implementing a staged reduction of the statutory reserve requirement ~~(GWM) by an average of~~ (GWM). This includes a 2 percent reduction for conventional and Sharia ~~banks,~~ banks starting November 1, 2026, intended to inject approximately Rp190 trillion into the ~~banking system. Additionally,~~ system, combined with a 1 percentage point reduction in GWM incentives through December 2026. To maintain exchange rate stability, BI has increased incentives for Domestic Non-Deliverable Forward (DNDF) ~~transactions and~~ transactions, raising the 12-month tenor incentive to 45 percent. Additionally, BI has extended the 0 percent down payment policy for property and vehicle financing through ~~late~~ December 31, 2027.

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