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FINANCE MINISTER BELIEVES TRADE WAR WILL NOT ERODE RI’S CREDIT GROWTH

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The construction sector grew 27.55 percent (yoy), while the agriculture and processing sectors grew 10.65 percent and 8.7 percent (yoy), respectively.

Greatindonesia.co.id, Jakarta – Finance Minister Sri Mulyani Indrawati believes that the intensifying trade war between the United States (US) and China will not have a significant impact on the growth of bank credit in Indonesia, which is a guideline reflecting the expansion of the business world.

“The credit is still very positive, so far. Especially for investment loans and working capital, as stated by Pak Wimboh, Chairman of the Board of Commissioners of the Financial Services Authority, just before Lebaran (post-fasting festivities),” said Sri Mulyani at the working meeting of the House of Representatives’ Budgetary Agency in here on Tuesday (11/6/2019).

The former Managing Director of the World Bank said the growth of bank credit was assisting in the recovery and growth seen in the middle of this year, after weakening in recent years.

The minister also said she hoped the momentum in growth will continue throughout 2019.

This condition will be realized if the momentum of domestic economic growth is maintained, and is able to counteract the impact of the economic slowdown due to a trade war between two economic giants, the US and China.

“Of course, overall economic growth must be maintained so that the optimism of business people will remain positive so that they will be able to increase their business volume,” she said,

As for April 2019, according to the Financial Services Authority (FSA), credit growth still grew at 11.05 percent on an annual basis (yoy).

In the growth of credit, investment credit grew by 14.34 percent (yoy), working capital loans 10.48 percent (yoy), and consumption loans grew 9.06 percent (yoy). The swift credit distribution was driven by the mining sector, which grew to 37.6 percent.

In addition, the construction sector grew 27.55 percent (yoy), while the agriculture and processing sectors grew 10.65 percent and 8.7 percent (yoy), respectively.

The bank credit risk, as of April 2019, is at a low level. This is reflected in the ratio of bad loans or non-performing loans (NPLs) to gross banks of 2.57 percent and net NPLs of 1.15 percent.

Meanwhile, the Capital Adequacy Ratio (CAR) was 23.78 percent, and the loan-to-deposit ratio (LDR) decreased to 93 percent from 94 percent. (azm)

FINANCE

RUPIAH FALLS OVER RUMOURED FED FUND RATE DROP

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The rupiah traded at Rp14,241 per US dollar on Thursday (13/6/2019) morning. Throughout the day, the rupiah moved within the range of Rp14,241 to Rp14,280 per US dollar.

Greatindonesia.co.id, Jakarta – The rupiah fell against the US dollar in the Jakarta inter-bank market on Thursday (13/6/2019) evening due to a rumoured decline in the Fed Fund rate.

The local unit declined 39 points, or 0.27 percent, to close at Rp14,280 per US dollar, compared to Rp14,241 per dollar earlier.

PT Garuda Berjangka President Director Ibrahim Assuaibi said in Jakarta on Thursday (13/6/2019) that a number of US economic indicators pointed towards a slowdown.

“Hence, it is not surprising that the Fed will lower its benchmark interest rate in the near future,” he said.

The first signal of the US economic slowdown was seen in the initial reading of the IBD/TIPP economic optimism index for June, which remained at 53.2, well below the previous 58.6, the highest in the past 15 years.

The second signal was the US producer inflation for May, which was recorded at 0.1 percent month-on-month (mom), slowing down from 0.2 percent (mom) in April. The third signal was the creation of new jobs in the US, which reached 7.4 million, as indicated by the Job Openings and Labor Turnover Survey (JOLTS), down from 7.5 million one month earlier.

Meanwhile, the rupiah traded at Rp14,241 per US dollar on Thursday (13/6/2019) morning. Throughout the day, the rupiah moved within the range of Rp14,241 to Rp14,280 per US dollar.

According to the Bank Indonesia mid rate, the rupiah weakened to Rp14,270 against the US dollar, compared to the previous level of Rp14,234 per US dollar. (cit)

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BI OUTLINES INDONESIAN PAYMENT VISIONS

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The Governor of Bank Indonesia, Perry Warjiyo.

Greatindonesia.co.id, Jakarta – The Governor of Bank Indonesia, Perry Warjiyo, has outlined Indonesia’s Payment System (IPS) 2025 Visions to ensure the current trend of digitalisation develops within a conducive digital economic and financial ecosystem.

The visions are a response to the recent proliferation of digitalisation that has significantly altered the risk landscape, through cyber threats, monopolistic competition and shadow banking, which could undermine the effectiveness of monetary controls, the stability of the financial system and sound payment systems, according to a statement released here on Thursday (30/5/2019).

The statement was delivered during an international seminar, entitled Digital Transformation of the Indonesian Economy, which was held on Monday (27/5/2019) in Jakarta.

The IPS 2025 Visions are: First, reinforce the integration of the national digital economy and finance to ensure the proper functioning of the central bank mandate in money circulation, monetary policy, and the stability of the financial system, as well as financial inclusions.

Second, work for faster digital transformations within the banking industry to sustain the banks’ role as a primary institution in the digital economy and finance, through the implementation of open-banking standards, as well as the deployment of digital technology and data in their financial products and services.

Third, ensure the interlinks between Fin-Tech and banks to contain the escalation of shadow-banking risks through the regulation of the use of digital technology (e.g. Application Programming Interface-API), business relations, and business ownerships.

Fourth, indemnify the balance among innovation, consumer protection, integrity, and stability, as well as fair competition, through the implementation of digital Know Your Customer (KYC), Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT), data/information/public business openness, and the deployment of Reg-tech and Sup-tech for reporting, regulatory and supervisory tasks.

Fifth, safeguard national interests on the cross-border use of the digital economy and finance through the obligation of domestic processing of all onshore transactions and domestic partnerships for all foreign players, under the consideration of the principles of reciprocity.

The five IPS 2025 Visions will materialise through five initiatives, to be carried out directly by Bank Indonesia in pursuance of the central bank’s duties and jurisdiction, as well as implemented through productive collaboration and coordination with relevant government ministries and institutions, along with the industry.

As a preliminary step towards digital transformation of the national payment system, and to help accelerate digital economic and financial development, Bank Indonesia held a soft launching of the QR Code Indonesia Standard (QRIS).

QRIS will allow all QR payments to interconnect and become interoperable using one standard QR Code.

Initially, Bank Indonesia will introduce QRIS in the Merchant Presented Mode (MPM), with implementation commencing in the latter half of 2019. (azi)

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FINANCE

BANKING TRANSACTIONS INCREASED DURING MAY 22 RALLY

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BI and other members in the Financial System Stability Committee (KSSK) said they regretted that riots occurred after the demonstration.

Greatindonesia.co.id, Jakarta -The demonstrations protesting the General Election on May 22, 2019, which became violent, did not significantly disrupt the payment systems of the banking industry, though transactions for fund transfers increased.

“The condition of the banking industry on May 22, 2019 was normal,” BI Governor Perry Warjiyo said in Jakarta on Thursday (23/5/2019).

Nevertheless, BI and other members in the Financial System Stability Committee (KSSK) said they regretted that riots occurred after the demonstration.

“Since yesterday (Wednesday, May 22) the banking industry has operated normally. Today, there are 13 banks that have taken withdrawals from BI for transaction needs,” Perry Warjiyo said.

On May 22, 2019, Perry Warjiyo detailed how transfers through the payment system in banks also saw higher volumes than regular days. For example, Perry said, transfers through Real-Time Gross Settlement (RTGS) services reached Rp577 trillion, an increase of some 10 percent from transfers on a normal day of Rp544 trillion.

Meanwhile, transfers through the Bank Indonesia National Clearing System (SKNBI) reached Rp14 trillion, with a volume of Rp696 thousand on May 22, 2019.

“So the implementation of economic transactions for the settlement of transactions regarding the clearing payment system in the SKNBI and the RTGS ran normally,” he said.

Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso said that several bank branch offices on Jalan MH Thamrin and Jalan Wahid Hasyim in Central Jakarta were closed during the demonstration.

However, the situation did not significantly disrupt banking transaction activities throughout the country.

“Now, this is the era of electronic transactions, so physical offices are not very important. Banking activities can be done through digital services,” he remarked.

Finance Minister Sri Mulyani Indrawati said the government believed forces from the National Police and the Military were able to restore security conditions quickly.

The business world, Sri Mulyani noted, also placed their trust in the government to handle the political situation.

“Therefore, we hope there will be no disruption to the momentum of economic growth from the current situation,” Sri Mulyani said. (dra)

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