The Financial Services Authority (OJK) Assesses That the Stability of The National Financial Services Sector is Maintained, Supported by Strong Capital and Adequate Liquidity
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By ojk.go.id
Press conference | January 17, 2024
The Financial Services Authority's (OJK) Monthly Board of Commissioners Meeting on August 30, 2023, concluded that the national financial services sector's resilience and stability were maintained, with prudential indicators such as adequate capital and liquidity, as well as a maintained risk profile, in the face of increasing global economic uncertainty.
Global economic divergence continues, with the US economy remaining resilient amidst core inflation that continues to decline. This economic resilience increases expectations that the Fed will be more hawkish. In Europe, economic growth fell again to 0.6 percent yoy in the second quarter of 2023 from 1.1 percent yoy in the previous quarter, while core inflation remained persistently high.
On the other hand, China's economic recovery momentum is increasingly moderate. China's economic indicators were recorded below expectations, with inflation entering the deflation zone and external performance contracting. In addition, pressure on the property sector in China has increased again as problems have emerged at several large property developers.
Domestically, the Indonesian economy grew positively in the second quarter of 2023, namely 5.17 percent yoy, up from the previous quarter of 5.04 percent yoy, driven by the good performance of household consumption and investment. However, it is necessary to pay close attention to the weakening trend in the latest indicators in line with the development of consumer optimism, the downward trend in core inflation, and the continued decline in commodity prices, which have put pressure on Indonesia's external performance.
These economic dynamics led to the weakening of global financial markets, both in the stock market, debt securities market, and exchange rate market, which was also accompanied by increased market volatility and outflows from the majority of emerging market financial markets, including the Indonesian financial market.
In the future, OJK will continue to monitor developments in the financial sector and be ready to take various policies necessary to maintain stability and increase the role of the financial services sector.
Apart from that, OJK continues to coordinate with the government, Bank Indonesia, and LPS and synergizes both with the financial industry and business associations in the real sector to support sustainable economic growth.