TEMPO.CO, Jakarta - Bank Indonesia (BI) Executive Director of the Monetary Economic Policy Department Firman Mochtar asserted that the closure of three major banks in the United States will not have insignificant effects on Indonesia's banking industry. The banks Firman mentioned were Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank.

Bank Indonesia, along with three members of the financial system stability committee, which comprises of the Finance Ministry, Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS), has coordinated its efforts with stakeholders to maintain the sustainability of the domestic financial market expectations.

"BI is maintaining the expectation as it is built on credibility. Once credibility is established then expectations will be maintained well. Surely, the aspect that supports in building expectations is communication, which is why you see authorities directly communicating to build expectations,” said Firman at the journalistic training event in Yogyakarta on March 20, 2023, Antaranews reported.

Firman explained that BI has conducted a stress test to measure the strength of the banking sector, by reviewing portfolios, liabilities, and assets that are influenced by macroeconomic indicators. Bank Indonesia has also observed the behavior of the domestic financial market actors following the closure of the three US banks.

"Starting from the behavior of funding placement in developing countries, including Indonesia, the effect is through the exchange rate. From a monetary policy standpoint, we will certainly mitigate instability in the foreign exchange market and in the financial market," said the Bank Indonesia official.

ANTARA

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