An economist has criticized the support by the Indonesian Central Bank (BI) on the affordable housing program initiated by the government of President Prabowo Subianto, saying that it would reduce the bank’s credibility as an independent monetary authority.

“If these concerns continue, capital outflows could increase, which poses a risk to the stability of Indonesia's financial sector,” KISI Asset Management Economist, Arfian Prasetya Aji, said in a statement obtained by Indonesia Business Post, on Thursday, March 6, 2025.

BI has expressed its support for the affordable housing program initiated by President Prabowo Subianto by providing liquidity of Rp130 trillion (US$7.96 billion). 

This increase in liquidity is expected to accelerate credit distribution to the housing sector, which will have an impact on related industries such as cement, steel, building materials, and construction workers. 

BI claims that this step aims to encourage economic growth, job creation, and improving public welfare through the housing sector. 

BI detailed three forms of support for this program. First, ensuring that the Asta Cita program contributes to high and stable economic growth. Second, providing liquidity incentives for banks that channel credit to priority sectors, including housing. Third, supporting housing program funding by purchasing Government Securities (SBN) on the secondary market. 

Buyers’ rejection

In the energy sector, Arfian highlighted that the new policy regarding the Reference Coal Price (HBA) has been rejected by several coal buyers from China. Indonesian exporters have requested a six-month transition period to be able to adjust to this new regulation, because it is considered to have been implemented too quickly. 

The determination of the HBA aims to give Indonesia greater control over coal export prices and maintain domestic price stability. However, this policy could hamper demand from China, potentially leading to renegotiation or cancellation of export contracts. 

“If this rejection continues, the impact could cause a decrease in export volume and revenue from Indonesia's coal sector, which contributes greatly to the country's foreign exchange earnings,” Arfian said.