Banking - Purbaya extends IDR200 tn fund placement in Himbara Until Sept26

Banking - Purbaya extends IDR200 tn fund placement in Himbara Until Sept26 Finance Minister Purbaya Yudhi Sadewa decided to extend the placement of funds amounting to IDR200 tn in state-owned banks (Himbara banks) until Sept26 to maintain liquidity and support credit growth. He stated that the funds, which originated from the budget surplus (SAL), were initially set to mature on March 13, 2026, and were immediately extended for six months. According to him, the fund placement policy that has been in effect since September 2025 has proven to help lower both deposit and credit interest rates. The government will reevaluate the policy in September 2026. Data shows that the six-month deposit interest rate fell to 4.73% in Jan26 from 5.03% in Nov25. Meanwhile, the three-month deposit interest rate fell to 4.68% in Jan26 from 4.71% in Nov25. The credit interest rate also decreased to 8.80% in Jan26, compared to the same period last year at 9.20%. Purbaya emphasized that the government will continue to coordinate with Bank Indonesia to maintain the stability of the financial system and encourage the distribution of credit. "The commitment to policy coordination with Bank Indonesia will be maintained. We also met with the BI Governor last Friday for policy consolidation," said Purbaya. (Source : Kontan). Comment : By rolling over these funds from the Budget Surplus (SAL), the government is essentially providing a massive liquidity cushion. Despite the success, there are two main risks to watch. As rates drop and credit flows more freely, there is a risk of a rise in Non-Performing Loans (NPLs) if the economy doesn't grow fast enough to support the new debt. Secondly if deposit rates fall too low (below 4.68%), investors might move their money out of IDR and into USD or other currencies seeking higher yields, putting pressure on the Rupiah. Maintain OW stance on the sector with BMRI, BRIS and BBCA as the picks.