Indonesia Plans Up to Rp20 Trillion Shift to Regional Banks to Boost Economic Growth

Indonesia's Finance Minister Purbaya Yudhi Sadewa announced plans to allocate between 5 trillion and 10 trillion rupiah per regional bank, including Bank Jakarta and East Java’s Bank Pembangunan Daerah Jawa Timur, to boost economic growth by increasing lending to cooperatives and small-scale businesses. This liquidity injection aims to complement the prior 200 trillion rupiah transfer into five state-owned banks, as funds in those banks have not been disbursed quickly enough to regional enterprises. The government’s cash deposit in the central bank, exceeding 270 trillion rupiah, will be the source of this funding. Additionally, the Finance Minister supports Jakarta Governor Pramono Anung Wibowo's plan to construct a new headquarters for Bank Jakarta, which will be financed by the bank itself and built on state-owned land under a 50-year lease, generating profits shared with the central government. The government expects these measures to stimulate economic growth and job creation, targeting an increase from the current 5 percent growth rate to 8 percent by 2029. The funds are intended primarily to support micro, small, and medium-sized enterprises across Indonesia's regions.