The government’s initiative to develop a Bullion Bank is considered a breakthrough in national economic policy, with the potential to strengthen Indonesia’s macroeconomic stability. An economist from the Faculty of Economics and Business, Universitas Gadjah Mada (FEB UGM), Wisnu Setiadi Nugroho, S.E., M.Sc., Ph.D., stated that the presence of a Bullion Bank would play a greater role in deepening financial markets rather than directly driving real economic growth. It expects the Bullion Bank to create liquid gold-based instruments, improve transaction efficiency, and strengthen the financial system.
“The impact on economic growth occurs indirectly, primarily through macroeconomic stability and increased investor confidence,” he explained on Tuesday (6/1/2026).
He further explained that firm gold reserves could help reduce exchange rate risks. Meanwhile, gold-based instruments have the potential to enhance the attractiveness of capital markets. However, without strong integration with the real sector, such as financing for industries or MSMEs, its contribution to Gross Domestic Product (GDP) would remain relatively limited.
“There is also a risk that the Bullion Bank will only benefit large market players, rather than MSMEs,” he added.
Can the Bullion Bank replicate the success of nickel downstreaming? Wisnu emphasised that the Bullion Bank’s achievements do not equate to those of nickel downstreaming. Although the impact of nickel downstreaming is still being debated, it receives support from a transparent industrial value chain that extends from raw ore to intermediate products, such as those used in electric vehicle batteries. Gold, however, has different characteristics compared to nickel.
‘Gold is quite different because it’s mainly used as a store of value and a financial instrument rather than an industrial raw material,” explained the lecturer from the Department of Economics at FEB UGM.
According to him, the Bullion Bank cannot fully replicate nickel downstreaming. Its focus is not on manufacturing, but instead on monetizing gold reserves and creating gold-based financial instruments.
Meanwhile, Dini Ghuzini, S.E., M.Sc., Ph.D., a lecturer from the Department of Economics at FEB UGM, highlighted the current trend of high global gold prices. She stated that the government needs to prioritize efforts to maintain economic stability and gold reserves. While active trading can generate profits for investors, the government should prioritize economic stability above all else.
“Historically, although the economies of emerging market countries tend to improve after shifting from a fixed exchange rate regime to a floating exchange rate regime, their reserves do not show a decline. One of the reasons is the precautionary motive against economic uncertainty, which may also apply to gold reserves,” Dini explained.
She also pointed out a global trend of increasing gold reserves in developing countries. Data from the International Financial Statistics (IFS) 2025 indicate a positive increase in gold reserves among developing countries, whereas gold reserves in advanced economies remained unchanged or even declined.
“The motivation behind this increase is that gold is considered a safe alternative instrument and offers higher returns compared to other instruments, such as U.S. Treasury Securities. Global uncertainty and geopolitical risks also compel countries to seek alternative instruments,” she elaborated.
Furthermore, Dini assessed that the development of a Bullion Bank does not automatically place Indonesia on par with countries that possess large gold reserves, such as the United States, Germany, Italy, China, and Australia. In absolute terms, Indonesia’s gold reserves remain relatively limited, despite being a significant global producer of gold.
Report by: Kurnia Ekaptiningrum
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