OJK Beware Of Some Risks Of Pressure On The Indonesian Financial Market In 2024

Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar. (Photo: Doc. Antara)

JAKARTA - Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar stated that his party is aware of a number of pressures on the financial market which will continue in 2024.

"Although the pressure on the financial market at the end of 2023 has eased, we are still wary of some of the risk factors that we are currently facing and have the potential to continue this year, including the condition of interest rates that are still at a high level, although it is projected that they will not rise again, and are even expected to decline in 2024," he said at the Financial Services Sector Press Conference & OJK Policy of the Daily Board of Commissioners (RDK) Meeting Results (RDK) held virtually, in Jakarta, quoted from Antara, Tuesday, January 10.

Based on projections from various multilateral institutions and analysts, global economic growth in 2023 is expected to be lower than in 2024, mainly due to slowing growth in China and European countries.

The risk of geopolitical escalation is also said to have the potential to further suppress global economic performance, and increase financial market volatility.

By 2024, countries representing more than 50 percent of the world's population will also hold general elections, especially a number of large countries that will affect geopolitical stability and certainty, namely the United States, the European Union, Russia, India, and Indonesia.

"Based on this, we remain optimistic that the financial services sector can deal with it, because the condition of the financial services sector until the end of 2023 and we estimate that it will continue in 2024 to be stable, which is supported by solid capital. This optimism is based on better capacity from our financial services sector (in the banking sector, capital market, insurance, financing and other industries) in absorbing the risks we have conveyed earlier," said Mahendra.

In dealing with this situation, in general, his party implements several comprehensive risk mitigation strategies, including intensive and sustainable surveillance policies that are expected to be able to maintain financial system stability.

OJK asks financial service institutions to continue to pay attention to aspects of prudence, professionalism, being innovative and always maintaining integrity.

Law enforcement steps will also continue to be strengthened to maintain public trust. In addition, the OJK asked financial service institutions to carry out periodic resilience tests to measure capital and liquidity resilience in various scenarios.

Next is strengthening governance and risk management as well as structuring the fields of the financial services sector through improving the provisions and issuance of various roadmaps and digital transformation.

Finally, he said, namely encouraging credit growth, financing, and financial inclusion by focusing on sustainable and innovative lending and financing, including for Micro, Small and Medium Enterprises (MSMEs) and consumption loans in response to dynamic economic conditions.