Indonesian banks stronger in facing global pressure: CIPS

04 January, 2019 | Source: Antara News

The Center for Indonesian Policy Studies (CIPS) has stated that Indonesian banks are now stronger in facing global pressure compared to the conditions in 1998.

"There are concerns that the 1998 economic crisis will reoccur as the Rupiah fell in value against the US dollar," Executive Director of The Center for Indonesian Policy Studies (CIPS) Rainer Heufers said here on Thursday.

In fact, he continued, the economic crisis in 1998 was very different from the 2018 economic situation.

The rate of currency depreciation in 1998 was far lower than in 2018.

"In 2018, banks in Indonesia are stronger, and Indonesia`s financial sector is much stronger in facing global pressure," he remarked.

In addition, he noted that the currency depreciation is far lower than it was in 1998.

Indonesian banks are stronger, and Indonesia`s financial sector is far less vulnerable to foreign risks.

In addition, the country`s foreign reserves vastly exceed those held in 1998, and the debt-to-GDP ratio is less than half of the 74 percent that the country experienced in 1998.

He also revealed that both budget deficit and general debt levels remain under control and well within legal limits.

This is happening even with Bank Indonesia (BI) following the normalizing policy of the US Federal Reserve and raising interest rates seven times by a total of 1.75 percentage points in 2018.

The BI Board of Governors earlier agreed on December 19 and 20, 2018, to hold the BI 7-Day Reverse Repo Rate at 6 percent, while also maintaining the Deposit Facility (DF) and Lending Facility (LF) rates at 5.25 percent and 6.75 percent, respectively.

BI believes that the policy rate is still consistent with efforts to reduce the current account deficit and maintain the attractiveness of domestic financial assets with due consideration to global interest rate trends in the next few months.

Furthermore, BI will also constantly strengthen coordination with the government and other relevant authorities to maintain economic stability and strengthen external resilience, which includes reducing the current account deficit to around 2.5 percent of GDP in 2019.

 

US companies perceive Indonesia as a potential regional hub for conducting their business and trade, Indonesia`s Trade Minister Enggartiasto Lukita stated.
Indonesia has eyed export of liquefied natural gas (LNG) to Cambodia to meet the demand for power plants in the country, Vice President Jusuf Kalla said here on Wednesday.
Indonesian Vice President Jusuf Kalla and Cambodian Prime Minister Hun Sen held bilateral talks at the Lotus Blanc Resort, Siem Reap, Cambodia, on Wednesday morning, to discuss the development of cooperation between both nations.
Economic diplomacy has become one of the priorities of the Indonesian foreign policy by boosting the country′s economic and trade cooperation with African, Central, and South American countries, Foreign Minister Retno L. P. Marsudi stated.
Indonesia and the European Union (EU) have developed relations across a wide spectrum of areas in the space of a few years as outlined in the EU-Indonesia Partnership and Cooperation Agreement (PCA). By Yuni Arisandy
Foreign Affairs Minister Retno L. P. Marsudi has called for reduction of plastic waste by using refillable bottles and reusable straws and bags.
Address: 1068 Budapest, Városligeti fasor 26. | MAP |
Phone: (+36-1) 413 3800 Fax: (+36-1) 322 8669
E-mail: embassy@indonesianembassy.hu