BI ready to anticipate worse crisis in Europe
Fri, June 15 2012 22:20 | 1334 Views
Jakarta (ANTARA News) - Bank Indonesia (BI) has prepared anticipatory measures which may be needed in case the crisis in Europe is worsening, the central bank's governor Darmin Nasution said.
Citizen walked before the Tokyo stock market several months ago. Economic crisis in European countries have had its impact globally as Indonesian central bank prepared some anticipations. Instead of foreign exchange reserves reached US$111,5 billion, Indonesian debts to Ireland, Portugal, Spain, and Greece are very small. (REUTERS/Toru Hanai)
... direct impact of the European crisis on Indonesian corporations and banks have so far been limited...
"We will increase supply of foreign currencies in the market to meet demand as part of efforts to stabilize the rupiah's exchange rate," he said in a press release received here on Friday.
Besides intervening in the market, he said BI would also buy state securities in the secondary market in its efforts to stabilize the rupiah and issue foreign currency term deposits and develop a number of other foreign currency transaction instruments.
Darmin said the direct impact of the European crisis on Indonesian corporations and banks have so far been limited.
According to data, Indonesia's foreign private debts from Europe per April 2012 were recorded at US$21.6 billion mostly from the Netherlands (57.3 percent), followed by Britain (10.7 percent), Germany (6.4 percent) and France (2.5 percent).
Meanwhile, the country's debts to other countries such as Portugal, Ireland, Italy, Greece and Spain are very small.
The impact of the crisis in Europe on the rupiah has been seen in the past few months with an increasing intensity in May shown by the depreciation of the local unit and decline in the share price index in Asia including Indonesia.
Indonesia's foreign exchange reserves in the year ended on May 31, 2012 meanwhile reached US$111.5 billion which are enough to meet 6.2 months of imports and government debt repayments.
To increase foreign currency supply, Bank Indonesia has also started auctioning foreign current term deposits and preparing hedging instruments.
"Bank Indonesia will continue to take measures to deepen the domestic foreign currency market to strengthen the rupiah value," he said.
He said BI has also strengthened policy-making coordination with the government including following up on the memorandum of understanding on maintaining the stability of the financial system signed on June 7, 2012.
The MOU explains about the mechanism and action plan in each institution as well as coordinated steps needed.
Editor: Ade Marboen
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