Indonesia to Extend $11.2 Billion Government Placement in State Banks

INDONESIA - JAKARTA. Indonesia's government will extend its placement of 200 trillion rupiah ($11.2 billion) at state-owned banks to July 2027 from the end of this year, Finance Minister Purbaya Yudhi Sadewa said on Wednesday.

The government has previously said it was placing the funds with state banks to boost credit, as it seeks to lift economic growth to 6%  this year.

 

Data on Wednesday showed Indonesia's economic growth slowed to 5.3% in the second quarter, from 5.6% in the previous three months, as household and government spending weakened.

 

Read Also: Indonesian Economic Growth Slows to 5.3% in Q2, but Beats Forecast

 

In June, Purbaya said the government would inject an extra 200 trillion rupiah in state banks, bringing the total planned injections to 400 trillion rupiah.

 

On Tuesday, Purbaya had said he might extend the placement into next year.

 

The government usually manages its cash reserves with the central bank, but Purbaya, who became finance minister in September 2025, moved some funds to state banks because he thought the banking system lacked the liquidity required to finance economic expansion.

 

Liquidity policy has been a source of tension between the central bank and the government for months, even before Bank Indonesia Governor Perry Warjiyo's surprise resignation last month, sources told Reuters.