Bank Indonesia Cuts GWM to Push Liquidity



Laila Afifa

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  • Logo of Bank Indonesia. REUTERS/Iqro Rinaldi/File Photo

    Logo of Bank Indonesia. REUTERS/Iqro Rinaldi/File Photo

    TEMPO.CO, JakartaBank Indonesia (BI) has decided to lower the minimum statutory reserves (GWM) by 50bps. With the cut, conventional banks' GWM is now 5.5 percent while sharia banks' is 4.0 percent.

    BI Governor Perry Warjiyo said the policy is aimed to ensure there is enough liquidity for banks to support credit performances and push economic growth.

    "This trimming is aimed at equating the distribution of liquidity from large to medium-small banks," Perry said after the central bank's board of governors meeting in Jakarta, Thursday, November 21.

    Perry said the policy would increase banks' funding sources, thus allowing credit disbursement to be more flexible.

    "The liquidity of conventional commercial banks will increase by Rp24.1 trillion, and sharia by Rp1.9 trillion," he said.  

    The new GWM policy is effective starting Jan. 22, 2020.