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BI to gradually scale back rupiah securities for credit room
The central bank has pared down outstanding SRBI by 4.5 percent since end 2024 to Rp 881.86 trillion in April in a bid to free up liquidity and boost domestic bank loans.
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The national flag flies at full-mast behind a fence bearing the Bank Indonesia logo at the central bank’s headquarters in Central Jakarta, in this undated photo. (JP/Rafaela Chandra)
B
ank Indonesia (BI) has trimmed its outstanding rupiah-denominated securities from Rp 923.53 trillion (US55.9 billion) at the end of last year to Rp 881.86 trillion as of April 21, in a move that aims to boost loans from domestic banks to the real sector.
“This demonstrates BI's effort to free up liquidity, allowing local banks to channel more loans,” Erwin Gunawan Hutapea, the central bank’s head of monetary and securities asset management, said on Wednesday, as quoted by state news agency Antara.
Erwin said Bank Indonesia Rupiah Securities (SRBI) functioned as a "temporary instrument" to absorb excess liquidity that banks had not yet allocated "for economic growth."
“If this liquidity doesn't have a temporary placement with a suitable tenor, there’s a risk it could be used for potentially risky activities,” he added.
Read also: Foreign investors favor BI securities over stocks, government bonds
BI Governor Perry Warjiyo warned last month that escalating trade tensions driven by the decision of United States President Donald Trump to impose so-called reciprocal tariffs on nearly all countries, especially China, could weigh on global economic growth.
As a result, the central bank expected Indonesia’s economic growth to come in "slightly below" 5.1 percent this year, or the midpoint of its 4.7-5.5 percent forecast range, mainly due to weaker exports to the US and softer demand from key trading partners, particularly China.
