A news release of the OJK issued here on Wednesday said a series of pressures on the financial market have come from global sentiments.
The external factors are related to normalization of monetary policy in the United States, which is expected to be more aggressive and was responded with the increase in the yield in the U.S. bond market.
The yield of the U.S. treasury bonds once hit the level of 3.11 percent or the highest since 2011, driving investors to make adjustment in investment in developing countries including Indonesia.
In line with the development, non resident investors launched net sell both in share and bond markets.
To follow the declining trend of share index in a number of countries, the composite share price index (IHSG) of the Indonesian Stock Exchange dropped to 5,994.6 points by the end of April, 2018.
In the state securities market (SBN), the yield of short term, middle and long term SBN rose 42.2 bps, 28.7 bps, and 14.2 bps respectively or averagely rose 5 bps in March 2018.
The OJK described as positive the performance of the financial sector in intermediacy as obvious from the 8.94 percent increase in bank credits and 6.36 percent rise in claims payable to financing companies.
Meanwhile, third party funds held by banks grew 8.06 percent. The premiums of life insurance and general insurance/reinsurance also grew 38.44 percent and 18.61 percent respectively.
Funds raised in the stock market already reached Rp49.6 trillion or higher than Rp45.1 trillion in the same period last year with the addition of 10 new listed companies.
Total fund of investment management also increase to Rp739.71 trillion by the end of April, 2018.
OJK said the market and credit risks are still in a controllable level with Gross Non Performing Loan (NPL) ratio of banks at 2.79 percent and Non-Performing Financing (NPF) ratio of financing companies at 3.01 percent.
The capital of Financial Service Agencies also is quite adequate with bank Car at 22.38 percent and the Risk Based Capital (RBC) of general and life insurance are 310 percent and 454 percent respectively.
Altogether, OJK said that the financial service sector is still in a fairly adequate condition to mitigate the impact of the global financial market turbulence.
OJK will continue to observe global economic developments and risk factors such as increase in interest rate and development in the U.S. Chinese trade negotiations and the impact on the performance of the national financial service sector, the OJK news release said.
(AS/B003)
(TZ.SYS/A/H-ASG/B003)
Reporter: antara
Editor: Heru Purwanto
Copyright © ANTARA 2018
