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Bank Indonesia (BI) committed 130 trillion rupiah (USD 7.9 billion) to support President Prabowo Subianto's affordable housing programme. This was confirmed by presidential adviser Hashim Djojohadikusumo, who also mentioned foreign investor interest in the scheme. As part of the plan, BI will purchase government bonds in the secondary market, while the finance ministry is contemplating issuing project-linked bonds. To support housing loans further, BI is cutting reserve requirements for banks, releasing 80 trillion rupiah in liquidity. The program, aligned with Prabowo's campaign vow to construct three million affordable homes a year, is expected to increase homeownership and economic growth.
Indonesia's central bank, Bank Indonesia (BI), has pledged a 130 trillion rupiah (USD 7.9 billion) commitment to finance President Prabowo Subianto's ambitious affordable housing programme. Presidential adviser Hashim Djojohadikusumo confirmed the news at an economic forum, during which he added that foreign investors had expressed interest in joining. Specific details about their participation, however, were not made known. Advertisement
The financing is in keeping with Prabowo's campaign pledge to build three million affordable houses annually, a step that seeks to solve Indonesia's shortage of housing. The scheme is intended to increase the availability of homeownership, especially among low-income households, as well as boost economic activity by spurring housing development.
For support of the programme, BI has launched fiscal instruments to mitigate liquidity constraints in the banking industry. Governor Perry Warjiyo said the central bank will buy government bonds in the secondary market to support the programme. Finance Minister Sri Mulyani Indrawati, on the other hand, said the government is considering issuing bonds directly related to the housing programme as a separate financing alternative in the long term.
In an attempt to promote greater housing loans, BI is granting banks the privilege of reducing reserve requirements, which is likely to free 80 trillion rupiah in liquidity. The policy is designed to enhance lending capability, which will allow banks to provide additional credit to property buyers and builders. By providing enough financial support, the government wants to make home ownership accessible to a wider number of people.
Despite BI's strong financial commitment, the central bank has not yet released a comprehensive statement detailing the specific execution of its funding plan. The success of the initiative will rely on effective regulatory support, seamless implementation, and cooperation with financial institutions. Additionally, foreign investor involvement could introduce additional capital and expertise, potentially strengthening the programme's long-term viability.
This massive housing drive is an integral part of the broader economic agenda of the government, which focuses on infrastructure development, employment generation, and better living conditions. If properly implemented, the scheme is likely to reduce Indonesia's housing gap substantially and fuel inclusive economic growth. The proactive step taken by BI in maintaining financial stability and encouraging investment in the housing market also reflects its alignment with national development priorities.
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