JAKARTA - Minister of Finance (Menkeu) Purbaya Yudhi Sadive said President Prabowo Subianto agreed to withdraw funds deposited in Bank Indonesia amounting to Rp200 trillion from the total government deposits of Rp425 trillion to be channeled to banks.
Purbaya, during a press conference after facing President Prabowo at the Indonesian Presidential Palace, Jakarta, Wednesday, September 10, said that the government's policy was aimed at moving the economy so that the goal of increasing economic growth could be achieved immediately.
"Yes, we have agreed (President, ed.)," said Purbaya in response to reporters' questions during the press conference, quoted by Antara.
Purbaya further explained that the Rp200 trillion fund was given to banks so that banks could increase their lending to the public.
"The goal is that banks have money, a lot of cash suddenly, and they (banks, ed.) cannot affect other places other than being credited. So, we force the market mechanism to run," said Minister of Finance Purbaya.
On the same occasion, Purbaya stated that the government would also seek that the funds disbursed to banks were not used for the State Securities (SUN) instrument. This is because the government wants the circulation of money to actually occur in the community and increase the economic activity of the community.
"It's like you put deposits in a bank, that's roughly rude. Later the distribution is up to the bank, but if I want to use them, I'll take them. However, later efforts will be made, the distribution will not be bought by SUN again," said Purbaya.
"We ask BI not to absorb the money. So, the money really exists (in) the economic system so that the economy can run," he continued.
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Purbaya revealed his plan to withdraw an unemployed money at Bank Indonesia amounting to Rp200 trillion during his inaugural working meeting with Commission XI of the DPR RI at the Parliament Complex, Jakarta, Wednesday morning. The funds mentioned by Purbaya refer to the Over Budget Balance (SAL) and the Remaining Budget Payment (SiLPA) of Rp425 trillion, which is currently stored in Bank Indonesia as a government account.
In a press conference at the Palace, Purbaya also answered questions about the possibility that his move could trigger hyperinflation. Purbaya explained that inflation could occur if the growth rate was above the potential growth rate.
"We are 6.5 (percent) or more. We are still far from inflation. So if I inject stimulus into the economy, the economy should still be at 5 percent, it's still far from inflation. That's what demand-for-inflation is called, and it's still far from where we are. Since the crisis, we have never grown 6.5 percent. So, our space to grow faster, is wide open, without provoking inflation," said Purbaya in response to reporters' questions.
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