2 Pressures of Bank Indonesia's Rupiah Securities on Banking

The Bank Indonesia Rupiah Securities (SRBI) instrument is exerting significant pressure on the banking sector, according to Hery Gunardi, Chairman of the National Banks Association (Perbanas). Gunardi, who also serves as President Director of BRI, explained that SRBI creates two main challenges: it intensifies competition for fundraising and absorbs liquidity, potentially reducing banks' intermediation capacity. The growing appeal of SRBI has led to increased competition for deposits, forcing banks to adjust their pricing strategies. This, in turn, tightens liquidity in the market. "The increase in SRBI's outstanding yield and volume amplifies liquidity pressure and tightens competition for rupiah fundraising," Gunardi stated during the Mid Year Economic Outlook 2026 event in Jakarta. Data from Bank Indonesia reveals a substantial rise in outstanding SRBI, reaching Rp 979.88 trillion by the end of May 2026, a significant increase from Rp 730.90 trillion in December 2025. Banks hold the largest portion, Rp 677.89 trillion, while non-bank entities possess Rp 260.44 trillion. Gunardi noted that this growth signifies SRBI's increasing competitiveness as a funding instrument for both banks and non-bank investors. Bank Indonesia has been strengthening SRBI yields across all tenors, aligning with a 100 basis point BI-Rate hike in May-June 2026, aimed at attracting foreign portfolio investment and bolstering the rupiah's exchange rate. The rising yields are structurally increasing pressure on the repricing of third-party funds (DPK) and are expected to compress banks' net interest margins (NIM). Gunardi advised that banks must maintain discipline in asset and liability management and focus on building low-cost funds like savings and current accounts amidst these evolving conditions, entering an era of "selective growth."

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The increase in SRBI's outstanding yield and volume amplifies liquidity pressure and tightens competition for rupiah fundraising.