Indonesia bets on gold to deepen markets, but risks capital diversion – Regulations
he government and financial authorities have rolled out new initiatives aimed at integrating gold into the financial market to expand the country’s bullion ecosystem.
While the push to promote gold investment could help bring the vast amount of physical gold held through private ownership into the financial system, analysts have warned that it risks diverting capital from other productive instruments.
The latest initiative came with the establishment of the Indonesia Bullion Market Association (IBMA), which is described as a “strategic organization” to help integrate and deepen the country’s bullion market.
Speaking at the launch event on Thursday, Coordinating Economy Minister Airlangga Hartarto said that the government’s push to develop the domestic bullion market came as part of its broader mining downstreaming policy.
The newly established IBMA also marks another step for Indonesia in developing its bullion ecosystem, after President Prabowo Subianto inaugurated the country’s first bullion banks in early 2025, managed by state-owned pawnshop PT Pegadaian and state-owned lender PT Bank Syariah Indonesia.
Indonesia’s bullion banks currently manage 177 tonnes of gold assets, with state-owned pawnshop PT Pegadaian holding 153 tonnes and state-owned bank PT Bank Syariah Indonesia (BSI) holding the remaining 24 tonnes.
Meanwhile, around 1,800 tonnes of gold in the country are privately held, worth roughly US$252 billion.
