ID :
34697
Tue, 12/09/2008 - 18:24
Auther :
Shortlink :
http://m.oananews.org//node/34697
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TIGHT LIQUIDITY MAY LAST ONE YEAR: BI GOVERNOR
Jakarta, Dec 9 (ANTARA) - Bank Indonesia (BI) Governor Boediono said the tight liquidity in the global market is expected to last for about one year.
"Based on a preliminary analysis, we believe the tightness of global liquidity will continue over the next six months to one year," he said at the House of Representatives (DPR) building here on Tuesday.
He said the global financial crisis which had caused the tight world liquidity had also led to the tightness of rupiah liquidity.
This was because of the many economic uncertainties the world was facing today, he said.
As a result, inter-bank relations were fraught with mutual distrust, causing tight inter-bank liquidity with banks only willing to provide assistance to other banks they trust or to big banks.
"For the past several months, inter-bank money market players have been casting doubts on the conditions of counterpart banks, and this has created further inter-bank divisions," he said.
He said that data at the inter-bank money market (PUAB) indicated a drastic fall in transactions rate.
In the January - August 2008 period PUAB transactions were worth Rp6.8 trillion per day while in the September-November period transactions were recorded at Rp3.9 trillion per day.
The BI governor said that in order to overcome the tight liquidity BI had adopted a number of policies such as lowering banks' minimum reserve requirement (GWM) to 7.5 percent in the rupiah currency. For the time being banks were only required to have a GWM of five percent while the remaining 2.5 percent should be met on October 24, 2009.
For foreign exchange currencies, BI had reduced banks' GWM from three to one percent.
Besides, BI has extended the fine-tuning operation tenure from 1-14 days to 1-30 days. It also has extended the FX Swap tenure from seven days to one months.
"Based on a preliminary analysis, we believe the tightness of global liquidity will continue over the next six months to one year," he said at the House of Representatives (DPR) building here on Tuesday.
He said the global financial crisis which had caused the tight world liquidity had also led to the tightness of rupiah liquidity.
This was because of the many economic uncertainties the world was facing today, he said.
As a result, inter-bank relations were fraught with mutual distrust, causing tight inter-bank liquidity with banks only willing to provide assistance to other banks they trust or to big banks.
"For the past several months, inter-bank money market players have been casting doubts on the conditions of counterpart banks, and this has created further inter-bank divisions," he said.
He said that data at the inter-bank money market (PUAB) indicated a drastic fall in transactions rate.
In the January - August 2008 period PUAB transactions were worth Rp6.8 trillion per day while in the September-November period transactions were recorded at Rp3.9 trillion per day.
The BI governor said that in order to overcome the tight liquidity BI had adopted a number of policies such as lowering banks' minimum reserve requirement (GWM) to 7.5 percent in the rupiah currency. For the time being banks were only required to have a GWM of five percent while the remaining 2.5 percent should be met on October 24, 2009.
For foreign exchange currencies, BI had reduced banks' GWM from three to one percent.
Besides, BI has extended the fine-tuning operation tenure from 1-14 days to 1-30 days. It also has extended the FX Swap tenure from seven days to one months.
