JOINT PRESS RELEASE
No.:
27/208/DKom
Jakarta, 4 September 2025 – Ministry of Finance and Bank Indonesia have strengthened policy coordination to support the implementation of the Government's Asta Cita programs, particularly in relation to strengthen the people-centered economy. This coordination has been realised through an agreement between the two institutions concerning the sharing of interest costs on Government programs, specifically Public Housing and the Merah Putih Village Cooperatives. Ministry of Finance and Bank Indonesia are firmly committed to ensuring that the policy synergy concerning interest cost sharing with the Government is implemented in a transparent, accountable manner and underpinned by robust governance. In implementation, the synergy will remain anchored to prudent fiscal and monetary policy principles while maintaining market discipline and integrity. This agreement is stipulated in a Joint Decree concerning Additional Interest in Supporting the Implementation of Government's Asta Cita Programs for a People-Centered Economy.
Fiscal policy will continue to be pursued in a prudent and sustainable manner to support sustainable economic growth. State budget (APBN) management is carried out cautiously, supported by optimised revenue, effective and targeted spending, and sustainable financing strategies. In this regard, expenditure is directed towards sectors with wide-ranging multiplier effects on the economy and inclusive growth, including people-centered economic sectors, such as (i) implementing public housing programs, (ii) providing support to state-owned banks disbursing loans to Merah Putih Village Cooperatives, and (iii) other Government programs agreed with Bank Indonesia to realise Asta Cita. Overall, the 2025 State Budget deficit is expected to remain low, supported by professionally managed financing.
Bank Indonesia continues to implement a policy mix to stimulate economic growth while safeguarding macroeconomic stability. Accordingly, Bank Indonesia has lowered the BI-Rate by a total of 125 bps since September 2024, marking the lowest level since 2022. Rupiah stabilisation policy continues to be strengthened through offshore intervention in NDF markets and onshore intervention in the spot and DNDF markets, coupled with government securities (SBN) purchases in the secondary market. Bank Indonesia has also expanded liquidity by reducing the position of Bank Indonesia Rupiah Securities (SRBI) from Rp923 trillion at the beginning of 2025 to Rp715 trillion by the end of August 2025. In addition, Bank Indonesia purchased SBN totalling Rp200 trillion through to the end of August 2025, including Rp150 trillion through the secondary market and Government debt-switching programs. SBN purchases in the secondary market are undertaken in accordance with market mechanisms, in a measured and transparent manner, and consistent with monetary programs to preserve macroeconomic stability, thereby maintaining monetary policy credibility. Monetary policy is also supported by the Macroprudential Liquidity Incentive Policy (KLM), which had reached Rp384 trillion as of the end of August 2025, as well as accelerated digitalisation of the payment system.
In supporting people-centered economic programs under Asta Cita, the Ministry of Finance and Bank Indonesia agreed to implement interest cost sharing. Interest cost sharing applies to SBN issued by the Government for Public Housing and Merah Putih Village Cooperatives programs. The cost-sharing mechanism is implemented by equally splitting interest costs on realised budget allocations for the two programs, after deducting returns on Government placements for the respective programs at domestic financial institutions. This agreement is effective starting in 2025 until the completion of the relevant Government programs. In practice, the interest cost sharing is carried out in the form of providing additional interest to Government accounts held at Bank Indonesia, in line with Bank Indonesia's State Treasury function as stipulated in Article 52 of the Bank Indonesia Act No. 23 of 1999 as lastly amended by Act No. 4 of 2023 concerning the Development and Strengthening of the Financial Sector juncto Article 22, and consistent with Article 23 of Act No. 1 of 2004 concerning State Treasury. The amount of the additional interest provided by Bank Indonesia to the Government remains consistent with monetary programs to preserve macroeconomic stability, while also synergising with fiscal policy to provide greater fiscal space, stimulate national economic growth, and ease the burden on the people.
Ministry of Finance and Bank Indonesia are committed to ensuring that policy synergy concerning interest cost sharing with the Government will be implemented by applying prudent fiscal and monetary policy principles to maintain stability and promote sustainable economic growth, while ensuring good governance, transparency, and accountability in accordance with prevailing laws and regulations. Further implementation will be closely coordinated from time to time, as has been closely practised to date. Close and prudent policy coordination between fiscal authorities and Bank Indonesia's monetary policy is important to maintain stability and support sustainable national economic growth.
