JAKARTA - Institute for Development of Economics and Finance (Indef) Economist Eko Listiyanto said the impact of the closing of Silicon Valley Bank (SVB) by the California Banking Regulator, United States, on the Indonesian economy is relatively small.
"In my opinion, the direct impact is small, because the relationship between SVB and the world of start-ups and banking in Indonesia, as long as I have been in Indonesia, is small," said Eko in an Indef Online Discussion, quoted from Antara, Thursday, March 16.
In addition, he views that the fundamental condition of banking in Indonesia is still good.
The Financial Services Authority (OJK) noted that banking liquidity is still maintained, which is reflected in the ratio of liquid assets to non-core deposits (AL/NCD) as of January 2023 of 129.64 percent and the ratio of liquid assets to third party funds (AL/DPK) of 29.13 percent, which is higher than the minimum threshold of 50 percent and 10 percent, respectively.
"In the current situation, we are saved by our banking business model which is not too complicated, not too deeply connected to the international community so that it breaks the chain effect," he said.
However, the level of banking caution still needs to be reviewed amid global conditions met by uncertainty.
Meanwhile, the closure of the SVB sparked negative sentiment towards the stock market and the Composite Stock Price Index (JCI), which is estimated to be only temporary.
Eko views that closing the SVB will make the Fed reduce aggressiveness in raising the benchmark interest rate so that the pressure on the rupiah can be reduced.
"It's just that if the JCI's volatility lasts longer for months, the rupiah still can't enjoy the reduced aggressiveness of the Fed," he said.
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