By Yi Wei Wong

Major Indonesian lenders' shares are up sharply on government plans to give them billions of dollars to support liquidity and loan restructuring as the economy is hit hard by Covid-19.

Shares of Bank Rakyat Indonesia rose 9.7% in Tuesday morning trade, while Bank Mandiri gained 6.5% and Bank Negara Indonesia added 5.5%. Bank Central Asia, the country's largest private bank, climbed 2.1%.

Under the program announced on Monday, the government will send 87.6 trillion rupiah ($5.9 billion) to top lenders, which will distribute the funds to smaller banks to help companies restructure loans.

The funds may provide partial relief for large state-owned banks, Trimegah Securities said in a research note. The outlook remains uncertain, however, as there is a lack of clarity on how the risk will be distributed if a further bailout of the financial system is needed, the brokerage said.

Write to Yi Wei Wong at yiwei.wong@wsj.com