BI Distributes Macroprudential Liquidity Policy Incentives Reaching IDR 295 Trillion Supporting Government Programs

JAKARTA - Bank Indonesia (BI) said that until the second week of January 2025, it had distributed incentives for Macroprudential Liquidity Policy (KLM) of IDR 295 trillion or an increase of IDR 36 trillion from the end of October 2024 worth IDR 259 trillion.

BI Governor Perry Warjiyo said that a loose macroprudential policy was taken to increase bank credit/financing in order to support sustainable economic growth and maintain financial system stability.

Perry conveyed one of them by strengthening the KLM Incentive strategy to increase credit/financing to priority sectors for growth and job creation, including MSMEs and the green economy starting January 2025, while still paying attention to the precautionary principle.

"As of the second week of January 2025, BI has distributed Macroprudential Liquidity (KLM) incentives of Rp295 trillion, or an increase of Rp36 trillion from the end of October 2024 of Rp259 trillion," he said.

Perry conveyed that the incentives in question had been distributed, among others, to the agricultural, trade, manufacturing, transportation, warehousing, tourism and creative economy sectors, construction, real estate, public housing, as well as MSMEs, Ultra Micro, and green.

Perry added that incentives had been channeled through state-owned banks of Rp129.1 trillion, state-owned banks of Rp130.6 trillion, BPD of Rp29.9 trillion, and KCBA of Rp5 trillion.

In addition, Perry said, his party will also maintain the Countercyclical Capital Buffer (CCyB) ratio of 0 percent, the Macroprudential Intermediation Ratio (RIM) in the range of 84-94 percent.

Furthermore, the highest ratio of Loan to Value / Financing to Value (LTV / FTV) for property credit / financing is 100 percent and Bank Motor Vehicle Loans / Financing is at least 0 percent effective from January 1 to December 31, 2025.

Next, the Macroprudential Liquidity Supporting Ratio (PLM) is 5 percent with a repo flexibility of 5 percent and a Sharia PLM Ratio of 3.5 percent with a repo flexibility of 3.5 percent, and an Foreign Funding Rate (RPLN) of 30 percent with a countercyclic parameter of 0 percent or plus minus 5 percent.

"Strengthening the publication of the transparency assessment of the Basic Credit Interest Rate (SBDK) by deepening the credit interest rate based on the priority sector which is the scope of the KLM," he explained.

Perry said BI continues to strengthen the response of the monetary, macroprudential and payment system policy mix to maintain stability and encourage sustainable economic growth.

According to him, monetary policy is balanced to maintain stability and encourage growth, while macroprudential policies, digitization of payment systems, deepening of the money market, and the economy-inclusive and green economy continue to be directed to encourage growth (pro-growth).

"BI continues to optimize the policy mix to maintain stability and help encourage sustainable economic growth and fully support the implementation of Government programs in Asta Cita, including for food security, economic financing, as well as accelerating the economy and digital finance," he said.