(Sept 18): Indonesia’s new finance minister will retain the policy of his predecessor of keeping about US$17 billion (RM69.33 billion) in the government’s standby funds with state lenders to help boost borrowing and economic activity.

The so-called SAL funds, estimated at about 299 trillion rupiah (RM69 billion) to date, will be placed through July 2027, Finance Minister Suahasil Nazara said at a budget briefing in Jakarta on Friday.

“SAL placements are being carried out and managed in such a way so as not to disrupt banking stability or the economy,” Suahasil said, adding that his ministry will communicate monthly with the banking sector and the central bank — where the funds were previously placed.

“Later, when the withdrawal takes place, the Ministry of Finance will coordinate to ensure there is no gap in funding availability within the banking sector,” said Astera Primanto Bhakti, director-general of Treasury.

Shares of state-owned PT Bank Mandiri, PT Bank Negara Indonesia, PT Bank Rakyat Indonesia and PT Bank Tabungan Negara held earlier losses on Friday.

One of the most prominent, and at times most controversial, measures introduced by former Finance Minister Purbaya Yudhi Sadewa had been to flush the banking system with cash in a bid to boost economic growth.

Purbaya, who was removed from his post earlier this week, had broke from the ministry’s conventional practice of keeping the funds with the central bank, which oversaw the liquidity management in the financial system as part of its monetary policy.

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