Arya News - The government has fully settled its remaining debt related to the Bank Indonesia Liquidity Assistance (BLBI) program issued during the 1997-1998 financial crisis, using Rp 55 trillion in Bank Indonesia surplus funds.
JAKARTA – The government has fully settled its outstanding debt related to the Bank Indonesia Liquidity Assistance (BLBI) program issued during the 1997-1998 Asian financial crisis, Finance Minister Suahasil Nazara said.
The settlement was completed in August 2026 using Rp 55 trillion in surplus funds from Bank Indonesia (BI), bringing an end to the government’s remaining securities issued as part of its response to the crisis, Suahasil said at a press conference on the state budget (APBN KiTA) at the Finance Ministry on Friday.
Suahasil said the government had issued various types of bonds totaling around Rp 640 trillion at the time to address the financial crisis.
“The government issued total bonds reaching Rp 640 trillion at that time, and we have been paying them back. Some of the types of bonds issued at the time were already paid off in July 2020, while some were paid off recently,” Suahasil said.
The obligations had different repayment schedules. Recapitalization bonds were fully settled in July 2020, while the remaining securities related to BLBI were settled in August 2026.
Suahasil said the latest settlement used BI’s Rp 55 trillion surplus funds based on the central bank’s audited 2025 financial statements.
Under prevailing regulations, BI’s surplus is transferred to the state treasury and recorded as separated state assets, or kekayaan negara dipisahkan (KND).
The surplus can be used, among other purposes, to settle government debt obligations arising from securities issued during the 1997-1998 crisis, according to Suahasil.
“With BI’s Rp 55 trillion surplus being used to repay the old debt obligations related to BLBI, the securities issued for handling the 1997-1998 crisis have now been fully settled in August,” he said.
Suahasil said the mechanism had been used repeatedly as BI generated surpluses, allowing the government to gradually settle the obligations.
“Its use is regulated for paying obligations or settling debt obligations, namely Republic of Indonesia government securities that were issued at that time as part of handling the 1997-1998 crisis. It remains in Bank Indonesia’s books,” he said.
The government’s debt issuance during the 1997-1998 crisis was part of its efforts to stabilize the financial system amid severe economic turmoil.
The settlement of the BLBI-related securities marks the completion of the remaining government securities obligations in response to the crisis, following the earlier repayment of recapitalization bonds in 2020.
Suahasil said coordination between BI and the government had enabled the remaining BLBI-related securities to be fully settled in August.
“This is part of the history of Indonesia’s financial sector,” he said.
BLBI was a liquidity support program provided by Bank Indonesia to commercial banks during the 1998 monetary crisis to help stabilize the banking system.
The government, through the Indonesian Bank Restructuring Agency (BPPN), managed around Rp 640 trillion in funds disbursed for banking-sector recovery, including bank recapitalization funds and approximately Rp 144 trillion in BLBI extended to around four dozen banks.