Finance Ministry and Bank Indonesia Issue Joint Decree to Share Interest Burden
Key Takeaways
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JAKARTA, Investortrust.id — Indonesia’s Finance Ministry and Bank Indonesia have issued a joint decree to share the interest burden of government programs under Asta Cita, including public housing, Red and White Urban Ward Cooperatives, and Red and White Village Cooperatives.
The two institutions stressed that the interest-sharing arrangement is designed to strengthen fiscal and monetary coordination while ensuring transparency, accountability, and strong governance.
“In implementation, this synergy continues to follow prudent fiscal and monetary principles while safeguarding discipline and market integrity,” said Finance Ministry Communication and Information Services Bureau Head Deni Surjantoro in a statement on Monday, Sept. 8, 2025.
The agreement is formalized through a Joint Decree on Additional Interest to Support the Implementation of Government Programs for Asta Cita People’s Economy.
Fiscal and Monetary Synergy
Deni emphasized that fiscal policy would remain cautious and sustainable, with state budget management supported by optimal revenue collection, efficient spending, and long-term financing strategies.
“Spending is directed toward sectors that generate broad and inclusive multiplier effects, including public housing, government banks providing loans to KKMP and KDMP, and other programs to realize Asta Cita,” he said, referring to the urban ward and village cooperative programs, respectively.
The 2025 state budget deficit is projected to stay low, backed by professionally managed financing, according to the ministry.
On the monetary side, Bank Indonesia Executive Director of Communications Ramdan Denny Prakoso explained that the central bank had pursued a policy mix to support economic growth while maintaining stability. BI has cut its policy rate by 125 basis points since September 2024, bringing it to the lowest level since 2022.
Rupiah stability has been reinforced with interventions in offshore markets through non-deliverable forwards (NDF), and in domestic markets via spot trading, domestic NDFs, and secondary bond purchases. BI also expanded liquidity by reducing outstanding Bank Indonesia Rupiah Securities (SRBI) from Rp 923 trillion at the start of 2025 to Rp 715 trillion by end-August.
Finance Ministry Communication and Information Services Bureau Head Deni Surjantoro delivers a statement in Jakarta on Monday, Sept. 8, 2025. Photo: Investortrust
Government Bond Purchases
BI’s purchases of government securities reached Rp 200 trillion by end-August 2025, including secondary market purchases and debt-switching programs with the government. These were conducted transparently and consistently with monetary objectives to maintain policy credibility.
The central bank also supported the economy with macroprudential liquidity incentives, which stood at Rp 384 trillion at end-August, and accelerated digital payment adoption.
To support Asta Cita’s people-focused programs, the Finance Ministry and BI agreed to share the interest burden on government bonds issued for public housing, KKMP, and KDMP.
“The cost is shared equally based on actual budget allocations for housing, KKMP, and KDMP, after deducting returns from government placements in domestic financial institutions. This arrangement applies from 2025 until the programs conclude,” Denny said.
He explained that the cost-sharing mechanism takes the form of additional interest payments on government accounts at BI, in line with the central bank’s role as state cashier under Article 52 of the Bank Indonesia Law No. 23 of 1999 as amended by Law No. 4 of 2023, and consistent with Article 23 of the State Treasury Law No. 1 of 2004.
The central bank noted that the additional interest remains consistent with monetary policy, ensuring macroeconomic stability while providing fiscal space to stimulate national growth and ease the burden on households.
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