JAKARTA (TheInsiderStories) – The Financial Services Authority (FSA) prepares a stimulus to maintain national economic growth as a countercyclical policy in anticipation of down-side risk from the spread of the coronavirus, said the agency today (02/26).
Some stimulus are relaxation of credit asset quality assessment arrangements with a ceiling of up to Rp10 billion (US$714,286), based only an interest payments. The incentives gives to the loans that have been channeled to debtors has been affected by the epidemic and for loan restructuring arrangements. The stimulus will take effect up to one year after it is stipulated, but can be extended if necessary.
“The stimulus policy is expected to mitigate the impact of the weakening global economy on national economic growth and stability,” said the FSA’ chairman Wimboh Santoso in Jakarta on Wednesday (02/26).
He rated, the global economy still be faced with considerable challenges. The world, said the official, will faced the challenges from the increasing geopolitical tension in the Middle East, the unfinished issue of trade war between the US and China, and the coronavirus.
Santoso conveyed, one direct impact of these developments is on the Chinese economy, whose contribution to world GDP reaches 16 percent. Its estimated that China’ economic growth will reach its lowest level over the past 29 years, which will also have an impact on the economic growth of its trading partner countries.
The impact of the high level of uncertainty in the global economy is also reflected in the domestic economy, especially on investment and external performance which tends to slow down, he adds. Amid the slowdown in the global economy, the board of FSA assessed the stability of the financial services sector is still in an awake condition.
Although the consumption rate is still growing stable, said the chairman, the domestic real sector still show a relatively mixed trend. The lack of positive sentiment from both global and domestic perspectives also influenced the performance of the local market, particularly on the stock market.
Up to Feb. 21, the stock market weakened by 0.97 percent compared to previous month and 6.62 percent from a year ago to 5,882.3. This weakening is more due to investor concerns about the coronavirus which will have an impact on the performance of listed companies in Indonesia.
Nevertheless, the bond market still strengthened with yields which fell by 17.3 basis points amid net sell by non-resident investors of Rp6.8 trillion. Banks were recorded as the backbone of the bond market by purchasing Rp52.4 trillion.
Bank loans recorded a positive growth of 6.10 percent and financing receivables increased by 2.4 percent in annual basis.The risk profile is still under control with a gross NPL ratio of 2.77 percent and NPF ratio of 2.56 percent.
Throughout January 2020, the insurance industry managed to collect premiums of Rp26.2 trillion and grew by 9.7 percent from a year ago. While, as of Feb. 24, fund raising through the capital market has reached Rp14 trillion.
The number of new issuers in the period was nine companies with a bid pipeline of 53 issuers with a total indicative offer of Rp21.2 trillion.
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