Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fathan Qorib, Andin Aditya Rahman
Mirza Adityaswara, Deputy Governor of Bank Indonesia (BI), believes that the decision to increase the BI rate to 7.25 percent was necessary to prevent equity from escaping from Indonesian on a large scale.
“Capital must be withdrawn to prevent it from escaping and indeed for the moment interest rates must be increased,” he stated in Jakarta on Tuesday.
The increased BI rate will result in a decline in credit growth. Mirza, however, asserts that the rate rise was necessary to maintain Indonesia’s long-term economic growth. The Government can contemporaneously issue fiscal policies to prevent capital from going overseas.
He affirmed the views of BI Governor Agus D.W. Martowardojo and Minister of Finance Chatib Basri that the situation Indonesia currently faces is a typical for developing countries.
The situation is about to get worse with the United States Federal Reserve planning to decrease its monetary stimulus packages, which will definitely affect developing countries.
“We and other developing countries face the problem of capital flight. This is the current world trend, and we must deal with it appropriately,” stated Mirza.
Meanwhile, economist Tony A. Prasetiantono agreed with Mirza’s argument that the BI rate increase was necessary even though rates at 7.25 percent cannot realistically damper the current inflation rate of more than 9 percent.
“IDR holders are reluctant to keep their capital in banks and typically choose to convert it into USD. This has caused an increased demand for USD, which is greatly pressuring IDR,” explained Tony through a short message to Hukumonline.
In further anticipation of these conditions, Tony suggests that the Government facilitate the restructuring by the private sector of their foreign loans. The purpose of this is to decrease the pressure on the IDR as a consequence of high demand for USD.
“If the IDR depreciates sharply, this will bring about another disaster through import triggered inflation. This is no less serious than the impact of rising interest rates,” stated Tony.
The impact of the interest rate increase, Tony continued, is the widespread decline of net interest margin in the financial sector. However, Tony asserts that this is more appealing compared to a high numbers of non-performing loans.
“It is better this way rather than increasing the interest rate on credit with the risk that non-performing loans will increase, having loan growth drop drastically, and in the end, profits will also be eaten too,” Tony concluded.
(hot/kc)
Fathan Qorib, Andin Aditya Rahman
Mirza Adityaswara, Deputy Governor of Bank Indonesia (BI), believes that the decision to increase the BI rate to 7.25 percent was necessary to prevent equity from escaping from Indonesian on a large scale.
“Capital must be withdrawn to prevent it from escaping and indeed for the moment interest rates must be increased,” he stated in Jakarta on Tuesday.
The increased BI rate will result in a decline in credit growth. Mirza, however, asserts that the rate rise was necessary to maintain Indonesia’s long-term economic growth. The Government can contemporaneously issue fiscal policies to prevent capital from going overseas.
He affirmed the views of BI Governor Agus D.W. Martowardojo and Minister of Finance Chatib Basri that the situation Indonesia currently faces is a typical for developing countries.
The situation is about to get worse with the United States Federal Reserve planning to decrease its monetary stimulus packages, which will definitely affect developing countries.
“We and other developing countries face the problem of capital flight. This is the current world trend, and we must deal with it appropriately,” stated Mirza.
Meanwhile, economist Tony A. Prasetiantono agreed with Mirza’s argument that the BI rate increase was necessary even though rates at 7.25 percent cannot realistically damper the current inflation rate of more than 9 percent.
“IDR holders are reluctant to keep their capital in banks and typically choose to convert it into USD. This has caused an increased demand for USD, which is greatly pressuring IDR,” explained Tony through a short message to Hukumonline.
In further anticipation of these conditions, Tony suggests that the Government facilitate the restructuring by the private sector of their foreign loans. The purpose of this is to decrease the pressure on the IDR as a consequence of high demand for USD.
“If the IDR depreciates sharply, this will bring about another disaster through import triggered inflation. This is no less serious than the impact of rising interest rates,” stated Tony.
The impact of the interest rate increase, Tony continued, is the widespread decline of net interest margin in the financial sector. However, Tony asserts that this is more appealing compared to a high numbers of non-performing loans.
“It is better this way rather than increasing the interest rate on credit with the risk that non-performing loans will increase, having loan growth drop drastically, and in the end, profits will also be eaten too,” Tony concluded.
(hot/kc)