ID :
31044
Wed, 11/19/2008 - 09:43
Auther :
Shortlink :
http://m.oananews.org//node/31044
The shortlink copeid
VP: GOVT NOT TO ISSUE BLANKET GUARANTEE JUST YET
Jakarta, Nov 18 (ANTARA) - Vice President Jusuf Kalla said the government would not as yet issue a blanket guarantee for bank deposits because the guarantee it had already provided and the current conditions of the national banking industry were sufficient to ensure the deposits' security.
"Some say a blanket guarantee is a good solution to strengthen confidence and prevent capital flight. But in 1998, when we applied a similar policy, a massive capital outflow occurred afterwards, interest rates rose to 60 percent, inflation soared to 80 percent and the rupiah plunged to Rp17,000 against the US dollar. So the result was beyond expectations," he said when opening a seminar on economic projections for 2009 here Tuesday.
He said Indonesia now had four kinds of banks , namely state-owned, private, foreign and joint-venture banks.
Although the government was only guaranteeing deposits amounting to a maximum of Rp2 billion, all deposits in state-owned banks were already guaranteed fully because the banks' existence was guaranteed by the government.
Foreign banks such as Citibank meanwhile had not gone bankcrupt and therefore they would not close their branches here, he said.
Regarding joint-venture banks, he said in the government's view, groups like Khazanah Bhd and Temasek would cover their losses on investments in Indonesia.
He said the condition of private banks in the country meanwhile was good with low non-performing loan ratios.
"Some say a blanket guarantee is a good solution to strengthen confidence and prevent capital flight. But in 1998, when we applied a similar policy, a massive capital outflow occurred afterwards, interest rates rose to 60 percent, inflation soared to 80 percent and the rupiah plunged to Rp17,000 against the US dollar. So the result was beyond expectations," he said when opening a seminar on economic projections for 2009 here Tuesday.
He said Indonesia now had four kinds of banks , namely state-owned, private, foreign and joint-venture banks.
Although the government was only guaranteeing deposits amounting to a maximum of Rp2 billion, all deposits in state-owned banks were already guaranteed fully because the banks' existence was guaranteed by the government.
Foreign banks such as Citibank meanwhile had not gone bankcrupt and therefore they would not close their branches here, he said.
Regarding joint-venture banks, he said in the government's view, groups like Khazanah Bhd and Temasek would cover their losses on investments in Indonesia.
He said the condition of private banks in the country meanwhile was good with low non-performing loan ratios.
