Encouraging Economic Growth, Purbaya Reveals Will Inject IDR 200 Trillion Into Banking

Minister of Finance Purbaya Yudhi Sadive. (Photo: ANTARA)

Minister of Finance Purbaya Yudhi Sadive emphasized his commitment to accelerating national economic recovery through optimizing the two main pillars, namely fiscal and monetary policies.

He reminded that if government spending is slow and monetary policy is too strict, then the impact could be worse than the previous government period.

"So my job here is to turn on the two machines, the monetary machine and the fiscal engine. Later I ask for the blessing of the parliament for me to carry out that task," he said in a meeting with Commission XI DPR RI, Wednesday, September 10.

As a first step, Purbaya said that he had reported to President Prabowo Subianto regarding plans to channel large funds into the national economic system.

"We have carried out the first step, I have reported it to the President, sir, I will put the money into the economic system. How much? I now have IDR 425 trillion in BI (Bank Indonesia) cash. Tomorrow I will put IDR 200 trillion," he said.

He added that the funds will be used to drive the real sector, provided that the incoming liquidity is not immediately withdrawn by the central bank.

"If it goes into the system and I will ask the central bank not to absorb the money. Let it be by implementing monetary policy, we will run a little fiscal side. But later they will also support it," he said.

Purbaya believes that with the synergy between fiscal and monetary policies, economic growth can be more accelerated.

"On my own government side, I will make sure the slow shopping goes even better," he said.

Purbaya explained, the Ministry of Finance will transfer government funds amounting to Rp200 trillion from Bank Indonesia (BI) to the national banking system.

According to him, this step aims to reactivate lending and encourage economic growth which had slowed down.

Purbaya explained that the condition of the domestic financial system is currently experiencing a liquidity drought.

This situation has caused an economic slowdown over the past two years, which has an impact on the difficulty of people getting jobs due to fiscal and monetary policies that are not well coordinated.

"I see that the Ministry of Finance can play a role there by moving some of the money that has been in the central bank. Mostly, I have moved to the banking system for IDR 200 trillion. We will spread to the system so that the money can grow and the economy can run again," he explained.

He added that this policy has also been communicated with BI Senior Deputy to ensure that the funds are not re-absorbed by the central bank, but are used optimally by banks.

Purbaya emphasized that the funds placed in government accounts in commercial banks will not be allowed to settle.

On the other hand, banks will be encouraged to distribute it in order to get a return, considering that the funds still have costs to be borne.

"So I forced the market mechanism to run by giving them weapons. So it forced banks to think harder to work in order to get a high return," he concluded.