Indonesia's Banking Sector Has No Difficulty Facing Economic Turmoil
Indonesia's banking sector is expected to have no difficulties in coping with current financial turmoil in Indonesia's economy. The country's banking industry is much stronger and healthier now than when the crisis in 1997-1998 or 2008 erupted. There have been reports that a few small banks have used the central bank's overnight lending facility, but various stress tests indicate that the banking sector is strong. Gross non performing loans per June 2013 have been kept below1.9 percent, which is significantly lower compared to previous periods.
Indonesia currently finds itself in a complex situation as global uncertainty regarding the ending of the Federal Reserve's monthly USD $85 billion bond-buying program, in combination with Indonesia's higher inflation and USD $9.8 billion current account deficit in Q2-2013, have resulted in a reversed investment flow, thus weakening the country's rupiah and stock market.
Financial Ratios Indonesia's Banking Sector:
| June 2012
Source: Bank Indonesia