Finance Minister rejects state banks' proposal to extend SAL fund tenor

Indonesian Finance Minister Purbaya Yudhi Sadewa has rejected a request from the Association of State-Owned Banks (Himbara) to extend the placement period for State Budget Surplus (SAL) funds to one year. Sadewa explained that the current arrangement provides adequate flexibility for banks to meet their liquidity needs while also ensuring the government can access its funds when necessary.

Speaking to reporters at the State Budget (APBN) KiTa press conference in Jakarta, Sadewa stated that the existing framework allows for substantial flexibility. For instance, Rp200 trillion is available until the end of the year, with Rp100 trillion reviewed quarterly and another Rp100 trillion subject to a flexible in-and-out flow. This structure is designed to accommodate potential government funding requirements beyond the planned budget.

The minister emphasized that the current scheme is carefully designed to maintain the government's ability to withdraw funds at any time if needed. He also noted that Bank Indonesia (BI) will gradually inject funds to maintain sufficient liquidity in the financial system. "Slowly BI will also fill it. If we withdraw funds, BI will also fill them. So, slowly the money supply in the system will be more stable than before," Sadewa explained.

Sadewa confirmed that the process of channeling additional SAL funds to Himbara has commenced, though he did not disclose the specific amounts allocated to each bank. The Ministry of Finance reported that the state budget recorded a deficit of Rp180.4 trillion, or 0.70% of GDP, by the end of May 2026. Despite increased spending, the government asserts that the fiscal condition remains stable due to robust tax revenue growth.