OJK Optimistic That Indonesia's Financial Stability Will Be Maintained Even Though There Is A Middle East Conflict

Illustration. (Photo: Doc. Antara)

JAKARTA - The Board of Commissioners for the Weekly Financial Services Authority (OJK) on April 17, 2024 assessed that the stability of the national financial services sector is maintained so as to be able to deal with increasing global geopolitical tensions, including conflicts in the Middle East. The national financial sector is maintained stable under the support of strong capital, adequate liquidity, and a manageable risk profile. "OJK is observing the latest developments in the Middle East and its impact on the intermediation performance and stability of the national financial system going forward," said Head of the Department of Literacy, Financial Inclusion and Communication of OJK Aman Santosa in Jakarta, quoted from Antara, Wednesday, April 17. Amid the increased uncertainty, the OJK assesses that Indonesia's economic fundamentals are well maintained, seen from maintained growth in the range of 5 percent, inflation located in the Bank Indonesia's target range, trade balance which still records a surplus, adequate foreign exchange reserves, as well as the availability of fiscal space.Aman said that up to February 2024, the exposure of financial services institutions (LJK) directly to the Middle East region is relatively limited. A valuable letter with domestic banking publishers of only Rp1.3 trillion or 0.06 percent of the total securities owned by banks, while insurance and financing companies do not have securities with publishers from the Middle East. Meanwhile, the value of investor ownership from the Middle East is recorded at Rp65.73 trillion or about 2 percent of the total share ownership value of non-residential investors. LJK's ownership (controll) by investors in the Middle East is recorded only in banking with asset shares of 0.1 percent of total banking assets. Going forward, buffers to maintain financial system stability amid potential conflict escalation in the Middle East are still considered to be quite adequate. This considers the highest level of capitalization conditions in the region, the risk of fairly controlled exchange value seen from the Netto Foreign Exchange Position (PDN) daily banking of the initial position of April 2024 which is far below the threshold, namely 1.67 percent with a threshold of 20 percent, as well as liquidity in the rup and the relatively still as a simple value.

Namun demikian, OJK akan tetap mencermati perkembangan risiko pasar lembaga jasa keuangan dan mencermati pembiayaan ke sektor-sektor yang memiliki exposure tinggi terkait konflik di Timur Tengah, termasuk mencermati kondisi individual LJK.OJK meminta LJK untuk senantiasa melakukan evaluasi terkait potensi dampak transmisi dari perkembangan perekonomian global dan domestik terhadap portofolio yang dimilikinya dan melakukan langkah mitigasi yang diperlukan.OJK juga terus berkoordinasi dengan anggota Komite Stabilitas Sistem Keuangan (KSSK) serta berkomitmen mengeluarkan kebijakan yang dibutuhkan secara tepat waktu.