JAKARTA – The depreciation of Indonesia Rupiah (IDR) against US Dollar (USD) is deemed having insignificant direct effect on banks’ capital, according to the stress test from OJK by considering factors, such as macroeconomy, credit risks, and the market itself.

Dian Ediana Rae, Executive Head of Bank Supervision of OJK, mentioned that the net foreign exchange position of banks is still below the threshold, categorised as “long position,” meaning that amount of foreign exchange (forex) assets is higher than forex liabilities. “Adequate banks’ capitalisation is believed to be able to curb the fluctuation of rupiah and the interest rate, which remains high,” he added in the press release quoted Monday (22/4).

As of now, third-party funds in foreign currencies clock up to 15% of total banks’ third-party funds. As of March 2024, the growth of third-party funds under foreign currency was improving compared to the beginning of this year.

On the other hand, rupiah depreciation may potentially generate positive impact on export of commodities and their derivative products. Hopefully, this condition will be able to manage withdrawal of non-resident funds, including driving the industrial sector to optimise its domestic component.

However, banks are ordered to monitor the potential of transmissive effect from global and domestic development towards the banking condition, including preparing mitigation measures. “The composure and rationality of the people, as well as coordination among related authorities, are the key to face the current condition of global economy,” Rae added. (LK/ZH)