Gov’t to Prepare Measures to Stabilize Economy In Face of Coronavirus Outbreak

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation
Date 2 Maret 2020
Category: News
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Coordinating Minister for Economic Affairs and BI Governor answer reporters’ questions after meeting with President Jokowi at the Presidential Palace yard, Jakarta, Monday (2/3). (Photo by: Jay/PR)

The Government, together with Bank Indonesia (BI) and the Financial Services Authority (OJK), discussed the developments of current situation, including global economy, already issued stimulus, and measures to deal with the coronavirus outbreak, Coordinating Minister for Economic Affairs Airlangga Hartarto said.

“Indeed, global market has slowed down but is starting to recover, meaning that it is not as deep as predicted. And there are several things that become the main factors related to the coronavirus, and of course these are measures that the Government needs to anticipate,” Airlangga said after accompanying President Joko “Jokowi” Widodo to meet with BI Governor Perry Warjiyo and Chairman of the OJK Board of Commissioners Wimboh Santoso at the Presidential Palace, Jakarta, Monday (2/3)..

Meanwhile, BI Governor said that the discussion was related to strengthening further coordination measures to stabilize and boost the country’s economy.

“There will be a need for coordination of measures, in terms of fiscal, other government policies, and stabilization measures from Bank Indonesia,” Perry said, adding that Bank Indonesia has lowered interest rates, relaxed macro-prudential policies, and continued to take measures to stabilize the financial markets, particularly the exchange rate and Government Bonds (SBN) market.

Perry further explained that Bank Indonesia is conducting ‘triple intervention’ in the financial market: stabilizing the rupiah in the Domestic Non-Deliverable Forward (NDF) and spot markets, as well as buying SBN on the secondary market in coordination with Ministry of Finance.

“Thus far, we have also reported that Bank Indonesia has bought SBN from the secondary market amounting to Rp103 trillion year to date (ytd), where we bought around Rp80 trillion since the coronavirus outbreak, which then global investors released,” he added.

On this occasion, Chairman of the OJK Board of Commissioners said that the OJK has a policy of easing collectivity protection from three to one pillar.

“Those two pillars are business prospects where there are currently many sectors whose business prospects affected by the coronavirus outbreak are disrupted. So, this does not need to be counted as a component of collectivity protection. Second, debtor’s conditions, in which many sectors have begun to be disrupted,” Wimboh said.

Wimboh also expressed belief that the OJK will not be left behind; yet, it must prevail ahead after calculating the debtor’s condition factors as it will not be considered a collectivity protection.

“So, collectability is only one pillar which we call accuracy in paying. The accuracy of paying is up to where the source is, whether it is from the group or from its sister company. So, later this non-performing loan (NPL) will not be affected. The NPL is in the banking,” he said.

The OJK, according to Wimboh, can provide an opportunity for borrowers to borrow again and provide space for banks to be able to provide greater loans, and the restructuring can take place smoothly.

“So, if there is a debtor that needs to be restructured, it should be restructured to be able to run smoothly. For the market, we can keep this market calm. No need to worry,” he said, adding that the OJK has a number of policies and we will release them if necessary.

He also added that market policies such as the capital market starting from auto-protection, be it soft selling or buyback can all be done if necessary.

“So, don’t worry. We have various tools that we can turn on as our analysis, if we really need it,” Wimboh said. (FID/EN)

Translator: Muhardi

Reviewed by: Mia Medyana Bonaedi

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