KSSK Test Stress: Indonesia's Economy Is Strong But Haunted By Risk

KSKK November 2023 (Photo: Aris Nurjani/VOI)

JAKARTA - The Financial System Stability Committee (KSSK) has conducted a stress test amid global economic uncertainty.

Governor of Bank Indonesia (BI) Perry Warjiyo revealed, overall the results of the KSSK stress test show that Indonesia's financial sector has strong resilience.

"However, there are several risks that come to haunt the prospect of stability in Indonesia's financial system stemming from global pressure," Perry said at a KSSK press conference, Friday, November 3.

Perry conveyed several indicator factors that could pose a risk to financial system stability, namely, the global economic slowdown, increasing divergence, increasing the Fed's benchmark interest rate and increasing bond yields from the United States (US) and countries in the world.

Perry added that other factors came from rising oil prices, heating geopoliticals, and the phenomenon of long drought due to el nino.

According to Perry, there are several reasons for strong national economic resilience, namely strong banking capital, capital adequacy ratio (CAR) at the level of 27.62 percent with controlled credit risk, as reflected in the ratio of non-performing loans (NPL) of 2.50 percent (gross) and 0.79 percent (neto) in August 2023.

Furthermore, the ratio of Liquid Equipment to Third Party Funds (AL/DPK) is maintained at the level of 25.83 percent. As well as maintained banking liquidity supported by the implementation of Macroprudential Liquidity Incentive Policy (KLM) which is valid on October 1, 2023, with a maximum incentive of 4 percent.

Perry emphasized that the results of the KSSK's stress test show that Indonesia's financial sector still has a high resistance amid various pressures.

"This is with various pressures with adequate bearings or buffers in facing these various risks," said Perry.