Bank Indonesia Addresses Criticism on SRBI's Impact on Money Supply

Response to Finance Minister's Concerns

Bank Indonesia (BI) has responded to criticism from Finance Minister Purbaya Yudhi Sadewa regarding the impact of its Rupiah Securities (SRBI) on the growth of money supply. During the Financial Forum at the Indonesia Stock Exchange, Deputy Governor Senior Destry Damayanti explained that BI uses a combination of monetary policies to maintain financial stability while supporting economic growth.

Monetary Policy Measures

Destry Damayanti highlighted that BI has been actively implementing expansionary monetary policies alongside contractionary measures. The central bank has purchased government bonds worth Rp290 trillion since the beginning of 2025, demonstrating its commitment to supporting economic growth. Additionally, BI has provided significant liquidity through FX swap and repo facilities exceeding Rp1,000 trillion.

SRBI's Role in Liquidity Management

Regarding SRBI, Destry explained that the instrument is used for liquidity management and maintaining financial stability. When there are significant capital outflows, SRBI serves as a trigger to attract investor inflows by adjusting its interest rates. After experiencing a significant drop in interest rates following the 125 basis point reduction in BI rate this year, BI has been normalizing SRBI rates, which has started to attract inflows into both SRBI and government bonds.

Context of the Criticism

Finance Minister Purbaya Yudhi Sadewa had expressed concerns that the SRBI was absorbing significant liquidity from the financial system, potentially slowing down money supply growth. He pointed out that despite injecting Rp200 trillion into the financial system through Himbara and Bank Jakarta in September 2025, the base money growth decelerated from 13% in September to 7% in October 2025. Purbaya suggested that the SRBI might be a factor contributing to this slowdown.

BI's Rebuttal

Destry Damayanti countered Purbaya's concerns by emphasizing that BI's monetary policy is not solely contractionary. She highlighted the central bank's efforts to balance stability and growth through various monetary instruments. The discussion took place during a Financial Forum attended by key financial stakeholders, including OJK Chairman Mahendra Siregar and LPS Chairman.