CHIEF Economist Mirae Asset Sekuritas Indonesia, Rully Arya Wisnubroto, said that optimism in the banking sector will still be promising, because credit growth in the banking sector will continue to grow high, which will be in line with BI projections in the range of 10 – 12%.
DPK growth, he continued, also started to improve in January and February, respectively at 5.8% YoY and 5.7% YoY, following the last three months of 2023 grew below 4% YoY.
“The loan to deposit ratio (LDR) is still relatively well maintained at below 85%, and with the non-current credit (NPL) level still low, there is still room for increased credit growth,” said Rully, Tuesday, (23/4).
This condition is the result of the government’s pro-growth macroprudential policies. Credit growth in January 2024 was recorded to be quite high, reaching 11.8% YoY, the highest in almost the last 5 years.
Credit growth in February 2024 was slightly lower but remained high at 11.3% YoY. Gross NPL in the same period remained low, namely 2.35%.
“We view that with loose macroprudential policies accompanied by adequate liquidity, credit growth will remain strong and support Indonesia’s economic growth even amidst various challenges throughout 2024,” said Rully.
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However, Rully also assessed the risks that must be mitigated in the future so that financial sector stability is maintained. It seems that banks will be more careful in disbursing credit.
This is because the banking credit restructuring stimulus policy for the impact of COVID-19 has ended as of March 31 2024. Currently banking Loan at Risk (LaR) is still quite high, namely 11.56% as of February 2024.
Outside of banking, he assesses that the current condition of the Indonesian economy is still faced with many challenges. One of the biggest challenges currently is the high pressure on the Rupiah exchange rate.
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He said that the movement of the Rupiah in the medium term is still very difficult to predict because it is very influenced by global issues, not influenced by domestic conditions.
“The weakening trend of the Rupiah is more due to the Fed’s higher-for-longer interest rate policy sentiment which has once more caused global market volatility and uncertainty,” said Rully.
This global sentiment also has an impact on the large flow of foreign capital out of Indonesia, and makes it difficult for BI to loosen monetary policy in the near future. (Try/Z-7)
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