Indonesia’s financial system stability (FSS) in Semester II of 2019 is maintained amid continuous uncertainty due to declining globalization, increasing risks in the global financial market, and unknown risks. It is closely related to the remarkable resilience of the banking industry, maintained resilience of corporations and households, and strong synergy between Bank Indonesia (BI), the Government, and the relevant authority in maintaining the growth momentum. BI Governor, Perry Warjiyo, said BI’s macroprudential policy ahead will focus on efforts to maintain FSS by anticipating potential risk increase in financial sector which is affected by the spread of COVID-19. Coordination with the Government and the relevant financial authority is also intensified both for policy mix formulation and for mitigation of increasing risks in financial system. Such statements are made during the launch of Book on Financial Stability Review (FSR) in Semester II of 2019 (No. 34, March 2020 Edition) today (28/4) themed “Strengthen Accommodating Macroprudential Policy, Support Economic Financing”.

Moving forward, pressure on FSS is estimated to increase in line with the widespread impacts of COVID-19 pandemic. The widespread COVID-19 transmission to many countries, including Indonesia, has become a threat to global and domestic macrofinancial stability. Global COVID-19 contagious impacts have also extended to Indonesia, primarily in tourism, trade/export, and investment. Meanwhile, efforts to break the chain of COVID-19 transmission in Indonesia may potentially reduce production and economic activities and increase pressure on domestic financial system. Considering that COVID-19 pandemic increases pressure on the economy, BI has introduced a policy mix aiming to support efforts to mitigate COVID-19 transmission risks, maintain money market and financial system stability, and boost economic growth momentum. Further, BI’s authority to take anticipatory actions to maintain FSS amid COVID-19 pandemic is reinforced by the signing of Government Regulation in Lieu of Law Number 1 of 2020. This authority is exercised through commitment to strong synergy and close coordination with the Government, Indonesia Financial Services Authority (OJK), and Indonesia Deposit Insurance Corporation (IDIC) as a national policy measure.

After COVID-19 pressure ends, it is predicted that the global economy will rise in 2021. Global and domestic economic recovery will boost corporate and household performance to a recovery phase. It will advance credit growth and Third Party Funds (TPF) will increase in 2021 within the range of 9-11% and 8-10% respectively.

The complete description of FSR in semester II of 2019 is downloadable in a digital format through QR code application or on the website of Bank Indonesia. FSR is Bank Indonesia’s main publication issued every six months in FSS sector. This book provides comprehensive information on results of assessment and research on FSS development in Indonesia. FSR also aims to build public confidence in the current and future Indonesia’s FSS and to give signal of risks to the public to take risk mitigation efforts.