OJK Says RI Banking Is Still Strong Amid Global Uncertainty

Banking illustration (Photo: Unsplash)

JAKARTA - The Chief Executive of the OJK Banking Supervision, Dian Ediana Rae, said that in the midst of global financial market volatility, Indonesia's banking industry's performance was still resilient and stable as of March 2024.

"Indonesia's Banking industry performance as of March 2024 remains president and stable, supported by a profitability rate of 2.62 percent in February, which was 2.52 percent and NIM at 4.59 percent while in February it was 4.49 percent," he said at the press conference on the Financial Services Sector and OJK Policy on the results of the April 2024 RDK, Monday, May 13.

Meanwhile, capital adequacy ratio (CAR) is still at the highest level of 26 percent compared to the previous 27.73 percent.

"So this is a fairly solid risk mitigation cushion amidst global uncertainty conditions," he said.

Previously, Chairman of the OJK Board of Commissioners Mahendra Siregar said that the stability of the financial services sector until April 30, 2024, was maintained. This contributes to maintaining the performance of the national economy amidst the high global uncertainty.

"The stability of national financial services is still maintained with a consistent intermediation performance and is supported by adequate liquidity and strong capital amid global uncertainty," he said.

Mahendra said the United States' economic growth slowed down by 1.6 percent in the first quarter of 2024. This figure is down when compared to the fourth quarter of 2023 of 3.4 percent. This is due to a significant increase in imports.

Nevertheless, Mahendra assessed that the US economic performance still shows signs of a higher strengthening than the original expectations.

"This encourages the return of high-for-longer interest rates to decrease. This means that the estimated cut in the Fed Fund Rate rate will decrease in the near future," he said.

Mahendra said domestic economic growth in the first quarter of 2024 was 5.11 percent or higher than in the fourth quarter of 2023 which was 5.04 percent.

This growth was driven by non-profit consumption that served households with an increase of 24.3 percent and government consumption of 19.9 percent (YoY).