REPUBLIKA.CO.ID, JAKARTA -- Chief Commissioner of the Financial Service Authority (OJK) Wimboh Santoso said the Indonesian banking industry is still in safe condition. His comment came to respond pressure on the national currency rupiah.
"The banking condition is safe. This (falling rupiah exchange rate) is temporary. This is caused by negative sentiment," Wimboh said here on Monday.
Wimboh explained the falling value of rupiah against the US dollar and declining index of the Indonesian Stock Exchange were natural. He said that Indonesia has been used to facing volatile condition.
The best strategy at present is to strengthen coordination between stakeholders, he said. "The most effective coordination is with the public to keep the public from getting worried," he said.
He said the present condition is temporary, therefore, there is no cause for much concern.
Previously, Bank Indonesia Governor Perry Warjiyo said the Central Bank is set to maintain economic stability despite disturbing pressure on rupiah. He said that Bank Indonesia to intensity the intervention, especially in the foreign exchange market.
Rupiah is feared to be under heavier pressure with the collapse of local currencies in growing number of countries such as lira in Turkey and peso in Argentina. Argentina is facing yet another mounting financial crisis, with the currency of Latin America's third largest economy plunging 45 percent against the US dollar as the nation struggles to prop-up the failing peso.
Perry said in addition to intensifying intervention, Bank Indonesia has purchased State Securities (SBN) from the secondary market. Bank Indonesia also opened auction for foreign exchange swap hoping to draw more than US$400 million in foreign exchange.
"That is what we have continued to do for stability. We also will continue close coordination with the Finance Ministry and the Financial Service Authority (OJK) to ensure financial system and exchange rate stability," Perry said here on Friday.