BI Seeks to Improve Liquidity Distribution Across Banks

RRI.CO.ID, Jakarta – Bank Indonesia (BI) is implementing the Macroprudential Liquidity Incentive Policy (KLM) to reduce liquidity disparities among banks. The measure aims to ensure that available funds are used more effectively to support credit distribution.

“Liquidity actually exists, but is it distributed evenly?” BI Governor Destry Damayanti said at the 100 Indonesian Economists Forum in Jakarta on Thursday, September 3, 2026, as quoted by Antara.

Adequate liquidity is reflected in the ratio of liquid assets to third‑party funds (AL/DPK), which stands at around 23–24 percent. Interest rates in the IndONIA market--the overnight rate in the Interbank Money Market (PUAB)--remain around 6 percent, after previously reaching a peak of 6.5 percent.

However, disparities in the loan‑to‑deposit ratio (LDR) show that liquidity has not been distributed optimally. Destry noted that members of the Association of State‑Owned Banks (Himbara) have relatively high LDRs due to strong credit growth.

“If we look at it, the LDRs of these banks are uneven. This means liquidity in the industry is segmented. It is not distributed equally,” she said.

In July, bank credit grew 13.6 percent, outpacing the 11.21 percent growth in third‑party funds (DPK). BI is now monitoring banks on a granular basis to identify conditions of tight and excess liquidity.

To improve distribution, BI is implementing the Money Market Deepening Program under KLM starting September 1. The scheme provides an incentive of up to 2 percent of DPK for banks that maintain a ratio of non‑repo holdings of Government Securities (SBN) and BI Rupiah Securities (SRBI) to total funding below 19 percent.

The incentive is provided through a reduction in banks’ demand deposits at BI. The policy is intended to encourage liquidity redistribution while deepening the domestic money market.

“In other words, we at BI understand this problem, so we need a policy that is ultimately targeted,” Destry said. ***