Indonesia's Central Bank Frees $4.9B Liquidity to Boost Housing Loans

In order to assist the government's housing target, Indonesia's central bank said that it will raise the amount of liquidity made available by lowering reserve requirements for banks that lend to the real estate industry to 80 trillion rupiah ($4.9 billion).

Since 2023, Bank Indonesia (BI) has been implementing similar liquidity policies to promote credit development by lowering the reserves that banks must maintain when lending to industries crucial to economic expansion. Governor Perry Warjiyo stated late Tuesday that the liquidity measure for real estate loans is already worth 23.2 trillion rupiah and will eventually increase to 80 trillion.

Following a meeting with government and parliamentary representatives, Warjiyo stated, "This is a form of Bank Indonesia's commitment to fully support the president's programs.He added that more support measures would be revealed later.”We see that the housing sector will provide support for high economic growth and job creation," he said.

Every year, President Prabowo Subianto hopes to construct three million affordable homes. The government and a Qatari businessman inked an agreement last month to build one million dwellings.

After meeting with State-owned Enterprises Minister Erick Thohir, Housing Minister Maruarar Sirait, representative Mukhamad Misbakhun, and Pandu Sjahrir, who was representing the recently established state investment agency Danantara, Warjiyo spoke.

According to BI data, 295 trillion rupiah in liquidity had been made available as of the second week of January as a result of many reserve requirements reductions for lending to industries like as construction, manufacturing, trade, tourism, and agriculture.