Greatindonesia.co.id, Jakarta – The UK Export Finance (UKEF) has selected Indonesia as the first nation in the world to have a country head to lead UKEF’s efforts to enhance trade relations between the United Kingdom and Indonesia.
“The choice of Indonesia as UKEF’s first overseas presence demonstrates the importance that the United Kingdom attaches to further developing Indonesia as a key trading and investment partner,” British Ambassador to Indonesia Moazzam Malik noted in a press release received by Antara on Monday.
As the British government’s Export Credit Agency, UKEF will help buyers across the world to trade with suppliers in the United Kingdom by offering attractive financing options.
Through this local presence in Jakarta, the UKEF will be better placed to deliver competitive and innovative finance to Indonesian companies and public bodies doing business with the United Kingdom.
“Significant opportunities exist for the two countries to cooperate in the key priority sectors, such as infrastructure, as was identified by the current administration and where the United Kingdom can offer added value,” Malik noted.
Richard Michael, the new country head for UKEF in Indonesia, remarked that in addition to its market-leading product range, UKEF is one of the few export credit agencies able to provide finance in local currencies, including the rupiah.
“UKEF is open for business in Indonesia, with billions of dollars in capacity now available for the country,” he added.
As the world’s oldest export credit agency established in 1919, UKEF will assist overseas buyers of British goods and services in terms of procuring from suppliers in the United Kingdom that offer quality and innovation by providing attractive financing options; borrowing at competitive interest rates from banks, with the benefit of a strong guarantee backed by the government of the United Kingdom; borrowing directly from the Government of the United Kingdom at competitive, fixed interest rates; and maintaining flexibility, with finance that can also be used to procure local supplies or those from other countries, alongside British supplies.
UKEF works with exporters in the United Kingdom and their overseas buyers to offer attractive financing options, including repayment terms of 2-10 years and up to 18 in some sectors, such as renewable energy; flexible British content requirements for projects supported; capital markets refinancing; sharia-compliant structures; as well as more than 40 local currency options, including Chinese Yuan, Hong Kong Dollars, Indian Rupee, Indonesian Rupiah, Malaysian Ringgit, Singapore Dollars, and Thai Baht.
RUPIAH’S STRENGTHENING HAS YET TO IMPACT STATE BUDGET
Greatindonesia.co.id, Jakarta – Finance Minister, Sri Mulyani Indrawati, stated that the Indonesian Rupiah’s appreciation against the US dollar has not had an impact on revenue in the state budget.
The Rupiah strengthened against the US dollar only in recent weeks, and its impact for a year cannot be looked at on a daily basis, she said at the parliament building here on Tuesday (14/1/2020).
“It is true that we will still look at its development and impact on the state budget in the past year and not on a daily basis,” she said.
The minister said the administration will still calculate it based on national and international economic developments to see the impact of the Rupiah’s strength on the national economy.
The rising state revenues were caused not only by the Rupiah’s low exchange rate against the US dollar but also by external factors, including the continuation of the US-China trade agreement, she said.
In addition, the government is still waiting for the reduction of the global interest rate which will allow for more capital inflows to Indonesia, she said.
“The low global interest rate will encourage capital inflows (to Indonesia),” she said.
The government is also alert over the widening current account deficit since the Rupiah’s strengthening will make the export value lower than the import value, she said
“We will also stay alert since we are still recording the current account deficit,” she said. (ant)
INDONESIA’S ECONOMY STILL HEAVY IN 2020 : DEPUTY MINISTER
Greatindonesia.co.id, Jakarta – Indonesia’s economy will find it hard to grow in 2020 because it cannot remain separate from the effects of the ongoing global turmoil, Deputy Finance Minister Suahasil Nazara projected. Although next year there will be general elections (elections) in the United States (US), it is not expected to reduce tension from global uncertainties that have taken place in recent years, Suahasil said.
“Next year there will be presidential elections in the US. We feel that whoever wins (the elections) will keep the tension in the US and China trade ties,” he said in Jakarta Monday.
The turmoil was not just an economic matter but a question of geopolitics between two countries, according to Suahasil. The US did not want China to develop faster, he believed.
“The trade tension is more than just an economic matter, it is about geopolitics, where the US does not want China to progress too fast. Therefore, that global tension will remain,” he noted.
He also hoped that the Japanese economy, which was currently quite strong with Gross Domestic Product (GDP) growing 1.8 percent annually in the third quarter of 2019 from the previous quarter, would continue to be stable so Indonesia’s export sector could rise.
“We hope Japan will recover, but of course there are risks. If China remains in a challenging situation, Europe will not recover, Britain will still be in a position to ascertain how it has passed through Brexit credibly,” Suahasil said.
The turmoil in various countries is putting a cloud over Indonesia’s economic conditions so the government will continue to reform, including through the establishment of an Omnibus Law related to Employment Creation and Taxation.
“The Omnibus Law aims to handle several laws which are considered to hamper investment. Through it we will address problems related to the Negative Investment List, labor reforms, EoDB, special economic zone, and land acquisition,” Suahasil said in conclusion. (ant)
BI CUTS ITS OUTLOOK FOR LOAN GROWTH TO EIGHT PERCENT
Greatindonesia.co.id, Jakarta – Bank Indonesia (BI) has significantly reduced its outlook for loan growth to eight percent, from the previous range of 10-12 percent.
BI Governor Perry Warjiyo, told a press conference in Jakarta on Thursday (21/11/2019) that the demand for bank credit by November 2019 was still on the decline, even though the liquidity in banks was sufficient.
Therefore, the Central Bank tried to be realistic by cutting 200 basis points (two percent) for the growth outlook of bank credit to eight percent as the realization of credit growth reached 12.1 percent in 2018, the governor remarked.
“The Board of Governors discussed factors affecting credit growth. This is due to the low demand for credit from the corporate side,” he said.
The decline in this projection also cannot be separated from the realization of credit growth until September 2019. In the ninth months of this year, credit growth slowed to 7.89 percent yoy compared to August 2019, when it was 8.59 percent.
The slow growth of credit is in line with third party funds (DPK) in September 2019, which only grew 7.47 percent yoy or slowed down compared to the August 2019 growth of 7.62 percent yoy.
That way, until November 2019, the Central Bank’s latest projections show credit growth in 2019 at eight percent yoy, while third party funds (DPK) grew eight percent yoy.
Regarding the cause of the slow growth of credit, Warjiyo said there was no problem in terms of the supply of banking liquidity. But he acknowledged that in terms of supply, the distribution of liquidity was not evenly distributed in the Commercial Banks Group of Business Activities (BUKU) I, BUKU II, and BUKU III.
He said the slow pace of demand for credit was the main cause for the slow realization of lending.
Some indicators that illustrate the slow pace of credit demand were the Central Bank survey of the business world which concluded that 53 percent of corporate respondents have not planned their investments for 2020 because they are still struggling with company consolidation.
“Another indicator is the decline in imports of capital goods and raw materials. The condition shows that production activities have not grown rapidly,” he said.
In addition, the Central Bank also saw a shift in funding sources. Corporations are now starting to rely heavily on funding sources from the capital market by issuing bonds.
Based on these indicators, BI concluded that credit demand did not yet support the function of banking intermediation.
The projection from BI for credit growth shows the lowest picture for the performance of banking intermediation.
The Financial Services Authority is still setting a credit growth projection at 8-10 percent, based on a presentation during a meeting with the Commission XI on Monday earlier this week.
The Indonesia Deposit Insurance Corporation (LPS) projects that credit growth can still reach 10 percent this year. (ant)
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