Research

IDR200tn Liquidity: Will It Truly Stimulate the Economy & Banking Stocks?

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Algo Research Team


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Key Summary:


  • Liquidity will not necessarily increase money supply
  • Credit growth depends on loan multiplier and demand
  • Minimal impact on SOE banks financial performance

The newly appointed Indonesian Minister of Finance (MoF) has made a bold move by injecting IDR 200 trillion (equivalent to $12 billion) into SOE banks, hoping it would boost growth through higher liquidity.


This step is perceived positively by market participants, especially as the new Minister gives a fresh posture that is vastly different from his predecessor’s conservatism and appears more aggressive in supporting the economy.


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