Indonesia to Finalize BLBI Debt Payment Using Central Bank Surplus

The Indonesian government is set to finalize the payment of its Bank Indonesia Liquidity Assistance (BLBI) debt, which originated from the 1997-1998 financial crisis, using non-tax state revenues (PNBP) derived from Bank Indonesia's (BI) surplus. Finance Minister Suahasil Nazara announced that the final payment is scheduled for August 24, 2026. Nazara explained that Bank Indonesia records a surplus from its operational activities, a portion of which is handed over to the state treasury and recorded as PNBP, according to regulations. This PNBP will then be utilized by the government to settle the BLBI bond obligations. The total government debt to BI for BLBI was recorded at Rp218.3 trillion and has been paid off gradually through the State Budget. "The bond debt of Rp218.3 trillion has been completed, it has been completed, we pay," stated Nazara, highlighting the coordination between the Ministry of Finance and Bank Indonesia that supported the settlement. He added that while the government's obligation to the central bank is fulfilled, the state's right to collect from BLBI obligors and debtors will continue. The BLBI debt stems from liquidity provided by Bank Indonesia to commercial banks during the Asian financial crisis (1997-98) to stabilize the financial system. However, some banks failed to repay the loans, leaving the government responsible. The settlement of this debt has been a long-standing fiscal burden for Indonesia, but its eventual payoff using BI's surplus marks a significant financial closure. Source: VOI English