Governor of BI: The results of the "stress test" show that the resilience of the Indonesian banking system is strong

The resilience of the financial system, especially banking, is maintained, both in terms of capital, credit risk and liquidity

Jakarta (Armfalcon.com) –

Governor of Bank Indonesia (BI) Perry Warjiyo in the Announcement of the Results of the BI Board of Governors Meeting in Jakarta, Tuesday, revealed the results stress test BI demonstrates the strong resilience of Indonesian banking.

“The resilience of the financial system, especially banking, is maintained, both in terms of capital, credit risk and liquidity,” said Perry.

Going forward, BI will continue to strengthen synergies with the Financial System Stability Committee (KSSK) in mitigating various domestic and global economic risks that could undermine financial system resilience.

He explained that strong banking capital can be seen from the capital adequacy ratio (Capital Adequacy Ratio/CAR) of 26.02 percent in February 2023. Credit risk is also under control, reflected in the ratio of non-performing loans (Non Performing Loans/NPL), namely 2.58 percent (gross) and 0.75 percent (net) in February 2023.

Another reflection of banking resilience can also be seen from banking liquidity in March 2023 which was maintained, supported by growth in Third Party Funds (DPK) of 7 percent (yoy). On the other hand, adequate economic liquidity was reflected in the narrow (M1) and broad (M2) money supply, which grew by 4.8 percent (yoy) and 6.2 percent (yoy), respectively.

Adequate banking and economic liquidity has a positive contribution to encourage increased credit or financing and support economic growth.

In line with the accommodative direction of BI’s liquidity policy, Perry said the indicator for the ratio of Liquid Assets to Third Party Funds (AL/DPK) was recorded as high, namely 28.91 percent in March 2023.

“In addition to extending credit or financing for the business world, adequate liquidity also directs bank interest rates to be conducive to supporting economic growth,” he added.

On the money market, he continued, IndONIA’s interest rate remained low at 5.65 percent on April 17, 2023. The yield on short-term government securities (SBN) was recorded at 6.24 percent or decreased by 20 basis points (bps) compared to February’s level. 2023, while long-term tenor SBN yields are under control.

The one-month deposit rate in March 2023 was also low at 4.1 percent, down 2 bps compared to February 2023. Loan interest rates are also conducive to supporting credit demand, which is 9.38 percent, an increase of 4 bps compared to the previous month’s level

Perry emphasized that his party would continue to ensure sufficient liquidity to maintain financial system stability and encourage continued credit increases or financing for national economic recovery.

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source: www.antaranews.com

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