JAKARTA: The financial system remains stable and the bank intermediation function continues to improve, Bank Indonesia (BI) Executive Director for Communications Agusman stated.
“Maintained stability in the financial system is reflected in the high Capital Adequacy Ratio (CAR) of the banking industry, reaching 23.1 percent, and liquidity ratio, 23 percent, in February 2018,” Agusman noted in a statement on Monday.
Improvement in the US economic indicators was accompanied by market expectations of an aggressive federal funds rate hike and heightened pressures on the rupiah along with the impending risk of a trade war between the United States and China. Such inauspicious dynamics triggered a capital reversal and global exchange rate depreciation pressure, including on the rupiah.
Nonetheless, congruent with BI`s stabilization efforts, controlled domestic inflation, Indonesia`s upgraded rating, and trade surplus that drew non-resident capital inflows, the rupiah quickly stabilized in the first half of April 2018.
