Sri Mulyani Says DPK Banks Are Still Fat: Credit Must Run And Become A Source Of Growth

Minister of Finance Sri Mulyani (Photo: Doc. Antara)

JAKARTA - The Minister of Finance (Menkeu) Sri Mulyani highlighted the condition of banking liquidity which is considered to be still abundant. According to him, this condition can actually be used to turn the wheels of the economy so that recovery steps will be even faster.

According to the Minister of Finance's records, the amount of deposits in the form of third party funds currently reaches IDR 7,250 trillion. This much liquidity cannot be matched by banking service institutions in optimizing the intermediation function.

This is reflected in the loan to deposit ratio (LDR) which is still loose at the level of 77 percent. In fact, the target set by the Financial Services Authority (OJK) for the ideal banking LDR is around 88 percent to 94 percent.

"We see that banks have room to start supporting economic recovery by extending credit," he said during an online press conference after a meeting with President Joko Widodo at the Merdeka Palace, Jakarta, Wednesday, February 16.

The strategy of the state treasurer to target the financial services sector cannot be separated from the report which states that banking intermediation has started to rise after being under deep pressure due to the COVID-19 pandemic.

"And indeed credit growth is now starting to recover, which previously experienced a contraction in 2020, now it has grown by 5.2 percent. We hope that this growth will accelerate in 2022 and 2023," he said.

On this occasion, the Minister of Finance also said that his party had started discussing the design of the State Revenue and Expenditure Budget (APBN) for the 2023 period. He said that next year's APBN was designed with a deficit framework of below 3 percent and priorities for the health sector.

"Law Number 2/2020 will be our basis for preparing the APBN and this is done very carefully," he said.