By: Reza Pahlevi )*
The Covid-19 pandemic is still taking place in many regions of Indonesia that have not yet implemented new normal. Nevertheless, the public is optimistic that economic recovery can be accelerated.
The Financial Services Authority (OJK) believes the national economic recovery will not be long even though the Covid-19 pandemic is still ongoing today. This can happen because the Indonesian economy relies on domestic demand as an economic model.
OJK Chairman of the Board of Commissioners Wimboh Santoso explained in a Webinar, from various projections including the IMF and World Bank that Indonesia was not worse than other countries. Once Covid-19 is finished, Indonesia can return to normal even higher in a short time. Because the Indonesian economy relies on domestic demand.
However, Wimboh emphasized that it was important for the government to take mitigation policies for Covid-19 that were in line with the current economic structure. With policies that are in line with the economic structure, this will certainly accelerate national economic recovery.
Wimboh added, Indonesia had taken steps to mitigate policies and economic recovery efforts, especially in the financial sector.
To reduce the impact on the real and financial sectors, a variety of policies and relaxation must be undertaken, stimulus and so on.
The government can of course set a budget deficit of more than 3%, while Bank Indonesia is allowed to buy government bonds and securities on the primary market indefinitely. Likewise, OJK, which has the authority to intervene earlier in relation to supervisory and resolution measures, is also permitted to expand the deposit guarantee scheme and collect funds from the public through the issuance of bonds.
The impact of the policy mix can be seen from the positive sentiment for the capital market that is starting to recover. Whereas last March the composite stock price index (CSPI) had touched the lowest level in the range of 3,900, now began to recover to around 4,900 and had touched 5,000.
He also mentioned that the stability of the Indonesian financial system was maintained, especially in terms of capital and adequate liquidity with a risk profile that was maintained.
In relation to the implementation of new normal, Wimboh said that his party was developing a normal protocol for the financial industry.
Later the FSA maximizes the role of technology as the use of digitalization in the financial sector such as sending documents online.
In addition, OJK has also prepared a scheme for systemic banks, both private and state banks, to be a buffer for liquidity or anchor banks in the Indonesian financial industry due to the Covid-19 pandemic.
In essence, systemic banks are the main suppliers in the interbank money market (PUAB). The anchor bank will channel the funds prepared by the Ministry from selling SBN to BI so that the responsibility remains with the Bank that will settle the restructured loans.
According to him, the policy will be in line with the credit restructuring policy regulated in No.11 / POJK.03 / 2020. With credit restructuring, if there are customers who have arrears in principal and interest can be categorized smoothly if the health of payments is still smooth until before the Covid-19 pandemic.
OJK noted that financial service sector stability is still maintained, supported by a high level of capital. In March 2020, the capital adequacy ratio (Capital Adequacy Ratio) decreased but was still quite high at 21.72% where at the time of December 2019 it had reached 23.31%.
Whereas the gross non-performing loan (NPL) risk increased slightly but was still maintained at 2.77% where in December 2019 it reached 2.53%. Some of the sectors driving the high NPLs are the transportation, processing, trade and household sectors.
Previously the government had poured Government Regulation (PP) No. 23 of 2020 concerning the National Economic Recovery Program (PEN) in the context of saving the national economy.
A number of economic recovery programs prepared include MSME interest subsidies, placement of funds for banks affected by restructuring, guarantees for working capital loans, capital injections for SOEs and government investment for working capital.
In addition to holding back the pace of economic slowdown, PEN is believed to be able to help labor-intensive industries to survive and save labor from unemployment.
Post-pandemic economic recovery is very possible. This optimism must be maintained, so that the rise of the national economy can be accelerated.
)* Active writer in The Jakarta Institute