BI Governor Perry Warjiyo: The Stability Of The Indonesian Financial System Is Still Ongoing In The Midst Of The World Economic Suspension

The Governor of Bank Indonesia, Perry Warjiyo. (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo views Indonesia's financial system stability as being maintained amidst the slowdown in the world economy.

"Especially in the midst of high global inflation and aggressive tightening of monetary policy for developed countries," Perry said in the launch of the Financial Stability Study Book No. 39 September 2022 in Jakarta, quoted from Antara, Friday, October 21.

He assessed that Indonesia's economic growth in the second quarter of 2022 reached 5.44 percent year-on-year (yoy) to successfully support financial system stability.

In addition, intermediation performance strengthened with credit disbursement growth at the end of the first semester of 2022 reaching 10.66 percent (yoy).

The restoration of intermediation is the result of Indonesia's accommodative policy response in close synergy with the government, the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS).

On the business side, Perry said that the recovery in corporate and household performance showed an increase in demand for financing, while in terms of banking, lending standards seemed to be getting looser.

"The resilience of the financial sector is also maintained in terms of strong capital and relatively loose liquidity," he said.

He explained that the banking capital level was recorded at a high level with a Capital Adequacy Ratio (CAR) ratio of 24.66 percent so that banks had strong durability and cushioning to absorb the potential for lowering credit quality.

Bank liquidity is also very loose, which is reflected in the ratio of Liquid Equipment to Third Party Funds (AL/DPK) which is 29.99 percent, as BI's commitment to continue to take loose liquidity policies.

Meanwhile, financial inclusion continues to increase, driven by acceleration of digitalization.