The COVID-19 pandemic is threatening the stability of Indonesia’s financial system, as it causes a supply-demand shock and weakens the country’s financial industry and macroeconomy, according to the Financial System Stability Committee (KSSK).Finance Minister Sri Mulyani Indrawati, who serves as the committee’s chair, said on Monday that the supply-demand shock and lower gross domestic product (GDP) outlook posed a “serious threat” to financial system stability. The KSSK was on alert over risks caused by the pandemic.“The coronavirus poses a serious threat to the economy and also to the financial system stability,” Sri Mulyani told reporters during a media briefing after the KSSK completed its quarterly assessment. “Financial system stability […] is on the alert status.” During the first quarter, the country’s financial markets were badly hit as foreign investors sold a net of around Rp 145 trillion (US$9.72 billion) worth of Indonesian assets as they flocked into safe havens. The capital outflow was towering compared to Rp 69.9 trillion recorded during the 2008 global financial crisis and Rp 36 trillion during the taper tantrum period in 2013, the KSSK revealed.The situation saw the rupiah fall to its lowest level in history at Rp 16,575 per US dollar on March 23, down 15.8 percent from February, according to the committee data. The currency has since recovered a bit, gaining 10.21 percent as of April 30 compared to late March, as the government issued $4.3 billion worth of global bonds in early April.The OJK revealed on Monday that loan growth in the banking industry amounted to 7.95 percent yoy in the first quarter, higher than the 6.08 percent recorded at the end of last year. However, no new loan demand was recorded in the period, as the growth came from the disbursement of existing credit facilities, OJK chairman Wimboh Santoso said.The nonperforming loan (NPL) ratio increased to 2.77 percent during the period versus 2.53 percent in December.Read also: Reform of Indonesia’s sluggish manufacturing sector urgently needed: Analysts“The uncertainties require strong measures in mitigating risks to macroeconomic and financial system stability,” the committee said. “The macroeconomic policy mix and a string of measures in the health sector are believed to be able to reduce the risks to macroeconomic and financial stability in general and gradually boost economic recovery.”Sri Mulyani said Regulation in lieu of Law (Perppu) No. 1/2020 provided the legal basis for financial authorities to take extraordinary measures in response to the virus risks.The Perppu provides the legal basis for the government to widen its state budget deficit beyond the normal 3-percent-of-GDP threshold, as it needs money to fund its battle against the impact of COVID-19. It also allows the central bank to directly purchase government bonds from the auctions, whereas previously BI was only allowed to buy such debt papers in the secondary market.BI Governor Perry Warjiyo said the central bank had used all its monetary instruments to maintain macroeconomic stability and help bolster the virus-battered economy.“With a low inflation level, we see room for lowering interest rates when the market stabilizes,” Perry Warjiyo said. “We have also injected liquidity of Rp 503.8 trillion to banks and the financial market, including by buying government bonds through the secondary market.”The central bank cut its benchmark interest rate to 4.5 percent in the first quarter this year. It also boosted market interventions in March to stabilize the rupiah through bond buying and inking repurchase agreements worth $60 billion with the United States Federal Reserve, among other central banks, to boost dollar liquidity supply.Read also: Businesses worry easing restrictions could prolong recoveryGoing forward, the KSSK pledged to strengthen its synergy and extensive measures to ensure macroeconomic and financial system stability. It would also closely watch potential global risks and the COVID-19 spread and its impacts on the domestic economy.Perbanas Institute economist Piter Abdullah said slowing economic activity due to physical restrictions might dry up liquidity among businesses, adding that it would put pressure on banks’ liquidity as businesses were unable to meet their debt service obligations.“While liquidity pressure has yet to cause any massive damage to the economy, many businesses can survive only until June,” Piter told The Jakarta Post. “Thus, financial authorities must roll out greater liquidity support for businesses and banks to enable them to survive, as that will also minimize risks to the financial system.”Topics : The other KSSK members are the finance minister, Bank Indonesia (BI) governor, Financial Services Authority (OJK) chairman and head of the Deposit Insurance Corporation (LPS).Read also: Consumer spending to contract in 2020 as pessimism takes holdIndonesia’s gross domestic product (GDP) grew 2.97 percent year-on-year (yoy) in this year’s first three months, the lowest level seen since 2001.The economy has almost come to a halt following physical distancing measures implemented by businesses and consumers to contain the coronavirus spread. The KSSK expects the economy to grow at 2.3 percent this year, a marked slowdown from 5.02 percent in 2019.
GUYANA and Haiti will meet today for the first time since the French-speaking Island defeated the Golden Jaguars in 2012, as the two amplify their preparation for this year’s CONCACAF Gold Cup. Haiti will open their Gold Cup campaign on June 16 against Bermuda, while Guyana will face defending Champions, USA, two days later in Minneapolis.However, tonight’s matchup, which takes place in Costa Rica, will be the last taste of international football for the Golden Jaguars before they wing out for St Pauls, Minnesota, to set up camp ahead of their Group D opening against the USA.According to a release from the Guyana Football Federation (GFF), they held their first training session on Sunday afternoon at the CAR Turrucares Playfield in San Jose.Johnson informed that despite just getting a few hours rest, everyone is fit and well and the session was satisfying.“We had to do something today, we knew the lads were tired but we knew we had to do something, bearing in mind that we have a game in 48 hours. So yes, it was a long journey but we got some good work in, a bit on how we want to play defensively without the ball, so it was a good session all in all, players have enjoyed it and now we are looking forward to (Monday’s) training session.”Touching a bit on team bonding, Johnson said it is getting better as the days go by, adding “I think the most important thing we see in camp is the unity. I’m not with all this local-based and international-based, what I’ve seen over the last week coming together is a unified group; a group that interacts well no matter where they’re from, we all pull on the same shirt to play for one common cause and that’s for Guyana.”Come the Haiti game, Johnson said they are looking to see improvements on a collective scale, reminding that it is not about the result at this juncture of preparations.“If it were about the result, I’d play the strongest team, I’d play everybody where they should be playing but for us, it‘s about learning and trying to keep something back and just making sure that the players are taking on board all the information we are giving them. The journey continues.”
Facebook Twitter Google+ Former Syracuse center Macky MacPherson has signed with the Buffalo Bills as an undrafted free agent, the Bills announced in a release Monday.MacPherson was invited to rookie mini camp by the Philadelphia Eagles after going undrafted in the 2014 NFL Draft, but didn’t receive an invitation back after completing the three-day tryout.On Monday afternoon he tweeted, “Proud to announce that I have officially signed with the Buffalo Bills. Thankful for the amazing opportunity.”In Buffalo, he’ll reunite with former SU head coach Doug Marrone, who is entering his second season as the Bills’ head coach.MacPherson played in 50 games, starting 38, as a center with the Orange, and will wear No. 76 for the Bills.AdvertisementThis is placeholder text Comments Published on June 2, 2014 at 3:45 pm Contact Matt: [email protected] | @matt_schneidman