Indonesian Economy Behind Shadow of Demonstration
Indonesian Economy Behind Shadow of Demonstration
A
A
A
JAKARTA - Is that successive demonstrations will take effect on the Indonesian economy? We start from Indonesia's financial market sector and banking system. December 2 demonstrations prediction bit much can have a negative impact.
According to market analysts money Platon Niaga PT Futures, Lukman Leong, market participants expect stable conditions in the country both politically and economically. Moreover, external pressure is so strong as the Fed or the Bank of the United States (US) plans to raise interest rates the US Fed rate. When coupled with negative sentiment in the country certainly has the potential to overwhelm the financial markets.
"The movement of the rupiah influenced sentiment domestically and externally. Thus, financial market participants expect the demo to walk peacefully, if anarchists could aggravate the situation," said Lukman Leong in Jakarta, recently.
Nevertheless, he continued, the movement of the rupiah against the US dollar (USD) has so far been fairly stable. It is estimated that next week trading around Rp13.400 per US dollar to Rp 13,500 per USD.
"The fundamentals we are still in good condition, the interest rate is still maintained, inflation is well maintained. We hope this good condition is maintained," he said.
For information, the value of the rupiah against the US dollar (USD) at the close of trading in the spot market, on Tuesday (22/11) back helpless. Rupiah in the Bloomberg index, fell 37 points, or 0.28 percent to Rp13.443/USD.
Last morning, rupiah opened lower 4 points or 0.03 percent to Rp13.410/USD. And throughout the day, the rupiah traded at Rp13.380-Rp13.460/USD. Meanwhile, the data SINDOnews sourced from Limas, the rupiah tumbled to Rp13.455/USD, where the rupiah opened this morning at the level Rp13.412/USD.
This sector is unlikely to be shaken by rumors of a bank run as they have ample short-term liquidity and sound financial performance.
According to data from the Deposit Insurance Corporation (LPS), which provides a deposit insurance scheme for Indonesian banking customers, the country's more affluent people control the bulk of deposits at commercial lenders.
LPS data show that affluent people, control 55.67 percent of the total third-party funds, while people with less than Rp 2 billion control 44.33 percent of total deposits.
The affluent are not likely to make a run on the banks as they have full confidence in the local banking system, Samuel Asset Management economist, Lana Soelistianingsih said.
"People will withdraw their money when they no longer trust the banking system, but (the trust in) ours is currently high and the economic situation is not so bad after all," Lana said.
Messages have widely circulated in social media in recent days, calling on Indonesians to withdraw all their money from banks, either in support of the movement against inactive Jakarta Governor Basuki T Purnama (Ahok), or just as a precaution against political and economic uncertainty in the country.
This is unlikely to affect affluent people, Lana said, as they understand that there are no real risks of a bank run.
Eric Sugandi, an economist at Jakarta-based think-tank the Kenta Institute, quoted data from the Financial Services Authority (OJK) that showed commercial banks' liquid asset ratio as an indicator that measures the liquid assets available for any demand for cash was 16.49 percent of their total assets at the end of September. He also pointed out that the total assets of the 118 commercial banks operating in Indonesia stood at Rp 6,465.68 trillion on Sept,30.
"I would say, subjectively, that this is big enough (to prevent a bank run)," he said.
Meanwhile, the loan to deposit ratio, used to assess a bank's liquidity by dividing its total loans by its total deposits, stood at 91.71 percent, suggesting that banks still have strong liquidity.
The economists echoed Chief Economic Minister Darmin Nasution and Finance Minister Sri Mulyani Indrawati, who said the country's economic indicators, as well as the banking sector, are solid. We will wait and see...
According to market analysts money Platon Niaga PT Futures, Lukman Leong, market participants expect stable conditions in the country both politically and economically. Moreover, external pressure is so strong as the Fed or the Bank of the United States (US) plans to raise interest rates the US Fed rate. When coupled with negative sentiment in the country certainly has the potential to overwhelm the financial markets.
"The movement of the rupiah influenced sentiment domestically and externally. Thus, financial market participants expect the demo to walk peacefully, if anarchists could aggravate the situation," said Lukman Leong in Jakarta, recently.
Nevertheless, he continued, the movement of the rupiah against the US dollar (USD) has so far been fairly stable. It is estimated that next week trading around Rp13.400 per US dollar to Rp 13,500 per USD.
"The fundamentals we are still in good condition, the interest rate is still maintained, inflation is well maintained. We hope this good condition is maintained," he said.
For information, the value of the rupiah against the US dollar (USD) at the close of trading in the spot market, on Tuesday (22/11) back helpless. Rupiah in the Bloomberg index, fell 37 points, or 0.28 percent to Rp13.443/USD.
Last morning, rupiah opened lower 4 points or 0.03 percent to Rp13.410/USD. And throughout the day, the rupiah traded at Rp13.380-Rp13.460/USD. Meanwhile, the data SINDOnews sourced from Limas, the rupiah tumbled to Rp13.455/USD, where the rupiah opened this morning at the level Rp13.412/USD.
This sector is unlikely to be shaken by rumors of a bank run as they have ample short-term liquidity and sound financial performance.
According to data from the Deposit Insurance Corporation (LPS), which provides a deposit insurance scheme for Indonesian banking customers, the country's more affluent people control the bulk of deposits at commercial lenders.
LPS data show that affluent people, control 55.67 percent of the total third-party funds, while people with less than Rp 2 billion control 44.33 percent of total deposits.
The affluent are not likely to make a run on the banks as they have full confidence in the local banking system, Samuel Asset Management economist, Lana Soelistianingsih said.
"People will withdraw their money when they no longer trust the banking system, but (the trust in) ours is currently high and the economic situation is not so bad after all," Lana said.
Messages have widely circulated in social media in recent days, calling on Indonesians to withdraw all their money from banks, either in support of the movement against inactive Jakarta Governor Basuki T Purnama (Ahok), or just as a precaution against political and economic uncertainty in the country.
This is unlikely to affect affluent people, Lana said, as they understand that there are no real risks of a bank run.
Eric Sugandi, an economist at Jakarta-based think-tank the Kenta Institute, quoted data from the Financial Services Authority (OJK) that showed commercial banks' liquid asset ratio as an indicator that measures the liquid assets available for any demand for cash was 16.49 percent of their total assets at the end of September. He also pointed out that the total assets of the 118 commercial banks operating in Indonesia stood at Rp 6,465.68 trillion on Sept,30.
"I would say, subjectively, that this is big enough (to prevent a bank run)," he said.
Meanwhile, the loan to deposit ratio, used to assess a bank's liquidity by dividing its total loans by its total deposits, stood at 91.71 percent, suggesting that banks still have strong liquidity.
The economists echoed Chief Economic Minister Darmin Nasution and Finance Minister Sri Mulyani Indrawati, who said the country's economic indicators, as well as the banking sector, are solid. We will wait and see...
(rnz)
Explore More