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JOINT PRESS RELEASE
SP – No.
23/83/DKOM, SP – 28/KLI/2021
SP – 16/DHMS/OJK/4/2021
Policy synergy between
the Ministry of Finance, Bank Indonesia (BI), Financial Services Authority
(OJK) and Deposit Insurance Corporation (LPS), banking industry and business
community is oriented towards stimulating credit and financing to priority
sectors. This is consistent with the
Integrated Policy Package issued on 1st February 2021 by the
Financial System Stability Committee to increase corporate financing and
accelerate economic recovery, including: (i) fiscal incentives and government
expenditure support as well as financing; (ii) monetary stimuli, accommodative
macroprudential policy and payment system digitalisation; (iii) prudential
financial sector policy; and (iv) deposit guarantee policy. Businesses are optimistic that the economic
recovery will endure. As was prevailing
sentiment at the Stakeholder Meeting to Accelerate the National Economic
Recovery, held today (01/04) in Surabaya, with BI Senior Deputy Governor,
Destry Damayanti, Deputy Minister of Finance, Suahasil Nazara, OJK
Commissioner, Heru Kristiyana, and Vice Chairperson of Commission XI of the
People’s Representative Council (DPR), Fathan Subchi, in attendance.
BI Senior Deputy
Governor, Destry Damayanti, reiterated the need to target lending and financing
towards national priority sectors.
Mapping has revealed 38 priority subsectors with a significant
contribution to GDP and exports, including six resilient subsectors, 15 growth
drivers and 17 recovery drivers. In East
Java, 21 priority subsectors increased production capacity in the fourth
quarter of 2020, with the trend expected to persist in 2021. Nevertheless, additional financing through
the banking industry remains constrained.
Therefore, Bank Indonesia is maintaining a policy mix to catalyse
economic recovery, including business financing. Bank Indonesia has cut its policy rate six
times since 2020 by 150 basis points to 3.50% and injected massive liquidity to
the banking industry. In addition, Bank
Indonesia is promoting prime lending rate transparency, strengthening the
Macroprudential Intermediation Ratio (MIR) by including export L/C as a
component of financing and gradually introducing regulatory disincentives in
the form of MIR-related reserve requirements to stimulate bank lending to the
corporate sector and export-oriented businesses.
The Deputy Minister of
Finance, Suahasil Nazara, took the opportunity to emphasise that the economic
recovery in 2021 is focused on three key aspects. First, health intervention through a free
vaccination program and disciplined application of Covid-19 protocols. Second, a survival and recovery kit to
maintain business continuity and sustainability. Third, structural reform through the Job
Creation Act (No. 11) of 2020. In
addition, the state budget has been designed to restore economic growth in
Indonesia through a 22% larger national economic recovery budget totalling
Rp699.43 trillion, accompanied by a Rp176.30 trillion health budget, social
support totalling Rp157.41 trillion, support for SMEs and the corporate sector
totalling Rp184.83 trillion, business incentives worth Rp58.46 trillion and
Rp122.44 trillion in priority program support.
Together, those five programs constitute a game changer in 2021.
OJK Commissioner, Heru
Kristiyana, reiterated the policy stimuli instituted by OJK during the pandemic
to maintain a solid financial services sector and revive the real sector,
including loan and financing restructuring.
The orchestration of policies issued by OJK in conjunction with stimuli
from the Government and Bank Indonesia has maintained financial system
stability, particularly in the banking industry. As a consequence of stimulus policy, the
national banking industry has maintained a high Capital Adequacy Ratio (CAR) of
24.55% (February, yoy), assets totalling Rp9,124 trillion (February) and
deposit growth topping 10.11% (yoy).
Nevertheless, policy synergy is required to overcome the current credit
contraction by increasing demand in the corporate sector. OJK is optimistic that the policy response
taken to accelerate credit growth will show early signs of success in the
second quarter of 2021.
The Vice Chairperson of
Commission XI of the People’s Representative Council (DPR), Fathan Subchi, took
the opportunity to confirm that government efforts to overcome the pandemic are
on track from an economic and health perspective, leading to stronger optimism
amongst SMEs and the corporate sector.
Meanwhile, the Job Creation Act is expected to help facilitate SME and
corporate sector recovery.
The Chief Executive
Officer of LPS, Lana Soelistianingsih, revealed that relatively stable funds in
the banking industry pointed to maintained public confidence. On the other hand, however, LPS hopes to see
lower lending rates moving forward to stimulate lending as an important
component of the economic recovery.
Seeking to encourage bank lending to the business community, LPS has
issued several policy measures, including lending rate reductions of 150bps for
rupiah loans at commercial banks and rural banks as well as 75bps for foreign
currency loans at commercial banks, while relaxing late payment fines and
Erwin HaryonoExecutive Director Communication DepartmentBank Indonesia
Rahayu PuspasariHead of Communication and Information ServiceMinistry of Finance
Anto PrabowoDeputy Commissioner For Public Relations and LogisticsThe Financial Services Authority
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