LPS Boss Says There Are Positive And Negative Impacts Of Risks Of Failure To Pay US Debt

Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadive. (Photo: Doc. Antara)

JAKARTA - Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadive said the risk of defaulting debt (US) had a positive and negative impact on Indonesia.

"Indeed, the impact of the US default will be significant, in its main financial market," Purbaya said as quoted by Antara, Friday, May 26.

Purbaya explained that currently the US has an A+ rating from the S&P rating agency (Standard & Poor).

When a country that has an A+ rating defaults, the rating will drop.

This condition, said Purbaya, could be a gap for Indonesia.

Indonesia, which is currently ranked below the US, can take the momentum to ask the S&P to increase its rating so that it can get loans with lower interest rates.

This scenario may be a positive impact received by Indonesia from the risk of default on US debt.

As for the downside, Purbaya sees the risk of defaulting US debt will provide shocks in the financial market.

Even so, the possibility of an impact is only small or not long. This is because many countries have reduced exposure to the US dollar.

On the other hand, Purbaya suspects that the US can look for alternatives politically in a short time if they end up experiencing debt failures.

Moreover, next year the US will hold a general election (election), so it is suspected that the government will be careful in anticipating the risk of default.

Purbaya added, if you follow such assumptions for the real sector, then the impact on the Indonesian economy will also be relatively limited.

If there are bond players, the price falls, it will also increase again. From the real sector, with such assumptions, the impact will be relatively limited, including to our economy," said Purbaya.