Bank Indonesia Claims That The Financial Sector Is Maintained In The Middle Of A Pandemic, Collaboration Of Stakeholders Is Key

Illustration (Photo: Doc. Antara)

JAKARTA - Bank Indonesia (BI) stated that the stability of the financial system in Indonesia is maintained amidst the pressure of the COVID-19 pandemic throughout 2020.

Head of the BI Communication Department Erwin Haryono said this positive signal was the result of synergy from the government, central bank and related authorities in carrying out joint responsibility in the financial sector.

"Various policy synergies with extraordinary measures related to the National Economic Recovery (PEN) have been taken to overcome the adverse effects of the pandemic on the economy and financial system," he said in an official statement, Friday, April 30.

According to Erwin, maintained financial system stability is reflected in the relatively stable financial market and well-maintained banking resilience, both in terms of capital, liquidity and profitability.

"Banking resilience in 2020 is still strong, supported by accommodative monetary and macroprudential policies, credit restructuring policies, and accommodative policies of other authorities," he said.

Erwin added that the contraction in corporate sales has begun to subside on the back of improving commodity prices and demand, as well as the improving ability to pay corporations. Pressure on household performance eased in line with easing pressure on corporations.

"But we still see that consumption is somewhat restrained in line with limited mobility," he said.

For information, on the macroprudential policy side, Bank Indonesia assesses the Prime Lending Rate (SBDK), Loosening the Loan to Value (LTV) for Home Ownership Loans (KPR) and Advances for Motor Vehicle Loans (KKB).

In addition, the central bank is also noted to have carried out a gradual reactivation of the Macroprudential Intermediation Ratio (RIM) in order to boost bank credit growth. Meanwhile, to increase access to finance for MSMEs, Bank Indonesia will also expand the scope of MSME financing, through the issuance of the Macroprudential Inclusive Financing Ratio (RPIM).

"In the future, policy coordination and synergy will be further strengthened to maintain macroeconomic and financial system stability, as well as to implement various integrated policies in order to accelerate economic recovery," he concluded.