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Financial system stability maintained in 2023, BI concludes

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Jakarta, IO – Financial system stability in 2023 remained well preserved amid the ongoing global economic turmoil and uncertainty. This has enabled the domestic economy to grow quite robustly. This is reflected in the resilience of the financial system as indicated by the Financial System Stability Index (ISSK) which has stayed in the normal zone throughout the year. In line with this, banking intermediation has increased, supported by higher risk appetite and adequate liquidity in the market. 

Going forward, Bank Indonesia (BI) is of the opinion that the financial system stability will remain strong, supported by synergy between BI and the government and the central bank’s loose monetary policies. 

BI deputy governor Juda Agung said that amid global economic uncertainty, BI remains focused on efforts to maintain macroeconomic and financial system stability while keeping the momentum of national economic growth. “BI is focused on three things in its macroprudential policy,” said Juda. 

First, to encourage balanced and quality credit by strengthening the implementation of the Macroprudential Liquidity Incentive Policy (KLM) and optimizing available liquidity incentives.

Read: WB Country Director For Indonesia Criticized For Comment About Prabowo’s Free Lunch Program

Second, in the context of cyber resilience, BI is finalizing its end-to-end Cybersecurity and Resilience (KKS) policy, starting from governance, prevention and handling measures when incidents occur, including coordination mechanisms between the authorities and the market, as well as monitoring and supervision. 

Third, inclusive and green finance and economy. Through this pillar, KLM and the Macroprudential Inclusive Financing Ratio (RPIM) as well as the loan to value (LTV) policy for home loan and auto loan that are environmentally sound will continue to be directed at increasing loan disbursement to the inclusive and green sectors, so that the commercial activities and sustainability of bank financing can remain balanced. (IO-2)

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