Sunday, November 20, 2016

Rumors Indonesia may experience a bank run on Friday (25/11) - calls for a bank run were "dangerous."

Rumors Indonesia may experience a bank run on Friday (25/11) - calls for a bank run were "dangerous."

There are widely circulating calls in social media for people to withdraw all their money from banks. Some of these calls reportedly came from the leaders of hardline Islamic organizations to force the authorities into taking tougher measures against Ahok over blasphemy allegations against him.

The non-active governor was declared a suspect last week in a blasphemy case related to a speech he made while campaigning on Pramuka Island in Jakarta's Thousand Islands district during September. Ahok made references to a Koranic verse during his speech, which prompted some Muslim groups to accuse him of having committed blasphemy.

Mass demonstrations are planned for Friday and Dec. 2, but as was previously reported, the Jakarta Police have issued a ban on street protests to prevent a repeat of the rally on Nov. 4, which turned violent.

"Bank Indonesia, as the monetary authority, is alert and prepared to deal with any possible scenario," Darmin said. He added that the Financial Services Authority (OJK), which supervises capital markets and the financial sector, was also prepared to stabilize markets in case of any shocks.

Darmin said the government will maintain a stable investment climate in the country.


Finance Minister Sri Mulyani Indrawati said the calls for a bank run were "dangerous."

"If people care about the Indonesian economy and about our country, they will also act to maintain [stability] and not allow themselves to be so easily provoked into destroying their own country," the minister said.

Central Bank Governor Agus Martowardojo said all economic indicators, from growth, inflation, the current-account deficit to foreign exchange reserves, are in a good shape. He said Indonesia's economy, even though it only grew about 5 percent in the third quarter this year, remains among the best performers in Asia.

Meanwhile, inflation is "manageable" at about 3 percent, and both the current account and foreign exchange reserves are solid. While inflation picked up in October, it is still considered low, hence the central bank's decision last week to maintain its low benchmark interest-rate policy.

Indonesia's current-account deficit narrowed in the third quarter, reducing pressure on the rupiah, while foreign-exchange reserves are still relatively high at about $115 billion, according to October data.

Indonesia's benchmark stock index has been on a roller-coaster ride last week, but this was due to global sentiment, including falling commodity prices and anxiety among investors over the prospect of the United States Federal Reserve raising interest rates in December.

Jakarta Globe

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