Holding Back, OJK Pede Distribution Of Indonesian Loans Is Uninvolved In Bank Closing In The US

Illustration of the Rupiah (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) stated that the closure of banking in the United States (US) would not affect the distribution of domestic banking loans.

Chairman of the OJK Board of Commissioners Mahendra Siregar estimates that domestic banking credit distribution will continue to grow by around 10 to 12 percent on an annual basis in 2023. "If you look at the credit growth that occurred in February 2023 and the initial figures in March that just passed, we are still witnessing credit growth in the double digit range or 10 percent and above," he said, quoting Antara, Monday, April 3.

This shows that lending is effective and can achieve a target of 10 to 12 percent on an annual basis throughout 2023.

Loan to Deposit Ratio (LDR), which in February 2023 was recorded at 79.8 percent, shows that banks still have the opportunity to increase loans. This opportunity is also supported by good banking capital adequacy as seen from the capital adequacy ratio (CAR) of 26.10 percent, up from 25.88 percent in January 2023. "Seeing the conditions in our banking and the ratios, actually the plan to achieve the targets set in 2023 will be carried out consistently," he said. Overall, Mahendra said the stability of the financial services sector is still maintained with the intermediation services of financial institutions that are increasing as well as adequate capital and liquidity.

"This condition is an important modality in dealing with global dynamics. March 2023, the fast rate of tightening monetary policy has begun to suppress global financial sector stability with the turmoil in the global banking system due to the closure of several banks in the US and Europe," he said.

He appreciated the financial authorities in the US and Europe for acting quickly to prevent the impact of the banning of banking closures. "On the other hand, the performance of global economic growth in 2023 is generally still resilient as shown by the solid US labor market and the pressure on inflation has eased, although it is still at a high level," he said.